Magazine Issues » March 2016

ASSOCIATION COLUMN: A rock-solid choice

GibraltarIf MacGyver could have been sent on a hypothetical mission to establish the most sophisticated and flexible wealth solutions for his consignors, he would have come to Gibraltar.

As Gibraltar is within the EU, this will allow any asset manager set up here, and which is compliant with the Markets in Financial Instruments Directive, to passport its services across the European market. 

There are three different types of categories available, with different levels of capital requirements and permitted business types. Therefore it is possible to accommodate the different needs of new providers wishing to set up in Gibraltar – from the simple asset management company to the international banking group wishing to establish a base in Europe for its pan-European business activities. 

Due to size/ease of access, Gibraltar is easier to do business with and a licence can realistically be obtain in 18 weeks. The powerful Gibraltar package includes: no VAT, no capital gains, no stamp duty, no tax on investment income and no withholding tax on dividends.

In terms of fund universe, Gibraltar has a very effective solution to offer. From the private fund, to a Ucits solution, the right choice is available for everyone.

The private fund solution is an effective and simple vehicle that can be used to regroup the interests of family and friends for a maximum of 50 potential investors. 

It is a flexible vehicle that can be easily set up and used for several types of underlying investments.

At the other end of the spectrum, you will find the Ucits fund solution, which is mainly for retail investors and is highly regulated accordingly to EU laws and directives.

The star among Gibraltar funds is certainly the Experienced Investor Fund (EIF). Gibraltar’s EIF regime is a regulated yet flexible fund product for investment by “experienced investors”. Some significant features of the EIF Regs 2012 include permitted investment from a participant who has a current aggregate of €100,000 invested in one or more EIFs, or a participant who invests a minimum of €50,000 in an EIF and is advised by a professional adviser. 

One of the principal attractions of Gibraltar as a fund domicile is the fact that no regulatory approval is needed before an EIF can begin to raise capital and commence its investment activity. In addition, an EIF can appoint a foreign non-Gibraltar-based fund administrator in certain circumstances. A foreign depositary/banker would need to be local to Gibraltar only if the fund is compliant with the Alternative Investment Fund Managers Directive.

An in-scope ‘AIFM’ can set up in Gibraltar and profit from pan-European passporting rights. It is even more important to note that Gibraltar is a fantastic place for start-up small AIFMs. 

Those small AIFMs do not have EU passporting rights. Nevertheless, because Gibraltar has a private placement regime, that is sufficiently open to gain the benefit of reciprocal rights with other EU jurisdictions such as Germany. 

This puts Gibraltar at a strategic advantage and the access of small AIFMs to other European markets should be possible on a simplified filling basis.

If MacGyver’s missions had centred around wealth management solutions, he would have loved Gibraltar.

The island would have offered him all the solutions he needed in an effective way, in the same way as the knife he always had in his pocket.

Carlos Martins is head of the training committee, Gibraltar Funds and Investments Association (GFIA)

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