Bahamas Mutual Fund

 The Mutual Funds Act, 1995 (“the Act”) and the Mutual Funds Regulations, 1995 (“the Regulations”) seek to regulate the mutual fund industry in the Bahamas through oversight and supervision by a Securities Commission and licensed Mutual Fund Administrators.

Open-ended mutual funds are licensed using existing vehicles such as the International Business Company, the Exempted Limited Partnership, and the Unit Trust. The new Bahamas Investment Condominium (ICON) is also a structuring vehicle that can be licensed as a SMART Fund, Professional Fund or Standard Fund in The Bahamas. It is not a company, not a partnership, and not a trust. It is a pooling mechanism and operating instrument for investment funds.

A Bahamas International Business Company (IBC) remains the ideal corporate vehicle for mutual funds due to their flexibility, freedom from exchange controls and guaranteed tax-exempt status.

 

Key Features

The Act recognises four classes of Funds:

  • The Standard Fund, which anticipates an offering to the general public, is a highly regulated, modern investment vehicle designed to operate as a traditional collective investment scheme.
  • The Professional Fund is a separate class designed for sophisticated investors and may be licensed by an authorised administrator (in addition to the Securities Commission) thereby enabling faster time to launch.
  • The SMART Fund is a specific mandate alternative regulatory test fund suitable for the innovative structuring of investment funds.
  • The Recognised Foreign Fund is an investment fund incorporated or established – and in good standing – in a prescribed jurisdiction.

 

Legal Requirements

Requirements

Description

General

  • Corporate  vehicle permitted

International Business Company (IBC), Limited Partnership (LP) or Unit Trust

  • Application fees

USD 500 (All types)

  • Annual license fees

USD 500 (All types)

  • Local physical office required

No

Share capital or equivalent

  • Minimum subscription

None

  • Minimum investors

None

Directors

  • Minimum number

2

  • Corporate directorship allowed

Yes

  • Local director required

No

Service Providers Required

  • Custodian

Yes

  • Fund manager/Investment manager

Yes

  • Fund administrator

Yes

  • Auditors

Yes

  • Legal Advisers

Yes

 

 Tax Treatment

The Bahamas has no income taxes, withholding taxes, capital transfer taxes, wealth taxes or gift and inheritance taxes.

 

Duration to Set Up

Around 1 to 2 months

 

Distinctive Benefits of Licence

A Finely tuned regulatory regime that provides confidence in the quality of supervision while ensuring that the demands of the investment community can be met.

Local fund administrators with an unrestricted licence (“authorised administrator”) have the ability to license professional and SMART investment funds independently of the regulator.

 

The Valsen Advantage

  • End to end comprehensive service
  • Speedy and efficient service
  • Expert advice on structuring options
  • Dedicated ongoing compliance support
  • Extensive network pool of service providers