Mutual Fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing . It is one of the most popular methods of investing throughout the world because it diversifies the risk among the investors. Seychelles Mutual Fund & Hedge Fund Act offers an excellent and tax effective structure for fund business. Mutual Fund in Seychelles can be constituted as a company, trust or a partnership. The most common structure for mutual fund is International Business Company, or Protected Cell Company.
The Seychelles Mutual Fund and Hedge Fund Act 2008 is a modern and comprehensive piece of legislation that replaced the Mutual Fund Act 1997. The new Act brought about significant changes. Possibly the most significant change lies in the administration of the mutual fund which can now be performed from any “recognized jurisdiction”.
Seychelles Mutual Fund
- Significant features of Seychelles Mutual Funds:
- Seychelles licensed funds are exempted from taxes on total fund’s income. They are also exempt from withholding tax and stamp duty.
- Seychelles mutual fund law also allows Umbrella funds to operate (i.e. a fund that invests in a range of different fund or sub-funds).
- A broad range of fund vehicle options are available to choose from. E.g., IBC (International Business Company, CSL (Special License Company), Trust, and PCC (Protected Cell Company).
- Mutual fund in Seychelles can be administered in Seychelles by a Seychelles Licensed fund administrator or outside of
- Seychelles by approved foreign administrator
Accounts for mutual funds can be prepared overseas and audited by approved overseas auditors
Types of funds Private Fund
Private Fund is a kind of a Mutual Fund, which is not open for subscription for everybody. The number of investors is restricted and does not require the details to be made public.
- No more than 50 investors
- Private business connection
- Aimed at the professional adviser looking to gather together a consortium of investors
- Prohibits any invitation to the public to subscribe for shares
- No minimum or maximum investment required
- Public Fund is a mutual fund other than a Private Fund or a Professional Fund. The Fund is designed to be mass marketed and needs to provide the detailed information to public in the offering document.
- A Mutual Fund that is not a Private Mutual Fund or a Professional Fund
- Designed to be mass marketed
- Applicant needs to furnish a detailed offering document
- The authority will need to be satisfied that all risks and plans of the fund are disclosed upfront to the investors
- Professional Fund is a mutual fund the shares in which are only made available to professional investors or high net worth investors, with the initial minimum investment per investor being USD 100,000. Recognized Banks, Mutual Funds, Insurance Companies, Securities dealers, etc., are considered as professional investors.
- Aimed for Professionals or high net worth investors with the initial minimum investment per investor being US $ 100,000
- Recognized Banks, Mutual Funds, Insurance Companies, Securities dealers, etc. are considered professional investors
Exempt Foreign Fund
- The Act also permits foreign funds from a recognized jurisdiction to conduct business from Seychelles without needing a Seychelles Fund license. This is provided the fund is already licensed as a mutual fund in a recognized jurisdiction; administered by a Seychelles licensed fund administrator and is either listed on a stock exchange or provides for a minimum investment of not less than USD 100,000.
- Already licensed as a mutual fund in a recognized jurisdiction
- Need not hold Seychelles fund license
- Must be administered by a Seychelles licensed fund administrator
- Is either listed on a stock exchange or provides for a minimum investment of not less than US $ 100,000
Mutual and Hedge Fund Vehicles
- Another distinct advantage of mutual and hedge funds licensed in Seychelles are the variety of options for fund vehicles:
- Seychelles International Business Companies (IBC) – tax exempt
- Seychelles Special License Companies (CSL) – has access to the growing Seychelles DTA tax treaty network including the excellent Seychelles/China DTA. – 1.5% on CSL income
- Seychelles International Limited Partnerships (LP) – tax exempt
- Seychelles International Trusts (unit trusts) – tax exempt
- Companies, unit trusts or limited partnerships constituted in a recognized jurisdiction – tax exempt
Other Fund Features
- Taxes – In addition to enjoying favorable tax status via the various fund vehicle options, Seychelles licensed funds are fully exempt from business tax on the income of a fund (except if using a CSL to access treaty benefits in which case the income tax would be 1.5%) as well as from withholding tax (dividends, interest, royalties, capital gains) and stamp duty.
- Auditing – auditing of accounts of Seychelles funds and fund administrators may be audited by approved overseas auditors including those qualified and belonging to recognised bodies in Australia, Canada, Hong Kong, Singapore, South Africa, UK and USA.
- Efficient Application and Approval – recognising the short window of opportunity often presented for hedge funds, the licensing authority desires to speed the approval process for those deemed “fit and proper” and with properly completed applications; especially for those applying for a private or professional fund license.
- Time Zone – Seychelles being located at GMT +4 falls within overlapping business hours from the Europe to Asia.
- Costs – Seychelles mutual funds can be established and administered for less than most competing jurisdictions.
- Value – factoring all of the above, Seychelles offers the best value of any country/jurisdiction in the world for the establishment and administration of a mutual fund or hedge fund.
- Contact us today for more information or complete the Fund Questionnaire to receive a quotation.
Mutual Fund Administration:
- As per the Act, Seychelles mutual fund may be administered:
- From within Seychelles by a Seychelles licensed fund administrator or
- From outside of Seychelles by an approved foreign administrator