Gibraltar: Offshore Business Sectors
Investment and Fund Management
The Financial Services Commission is responsible for the regulation of investment business in Gibraltar. See Offshore Tax Regimes for further details.
Banks or investment companies offering offshore investment management services to high-net-worth individuals or corporate investors are regulated under the Financial Services Ordinance 1998. See Banking for a description of the procedures followed by the Financial Services Commission when considering the issue of a license; the same procedures are applied to investment companies as to banks.
There is a lively investment management sector in Gibraltar, with around 19 licensed portfolio management firms. Many of the banks in Gibraltar also offer investment management services, and there are also independent stockbrokers. The investment fund sector is regulated under the Financial Services (Collective Investment Schemes) Act 2011.
The Financial Services Collective Investment Schemes Act 2005 was replaced by the Financial Services Collective Investment Schemes Act 2011 and came into force on 13 October 2011. The new Act incorporates EU Directive 2009/65/EC on Undertakings for Collective Investment in Transferable Securities (UCITS IV Directive) into Gibraltar law. The new Act permits UCITS IV funds and UCITS management companies to be domiciled and operate in Gibraltar.
Investment funds in Gibraltar are usually formed under a trust deed either as unit trusts or mutual funds, or under the Companies Ordinance as private or public companies. A public investment company (PIC) must have a minimum paid-up capital of GIP50,000 (at the time of writing) and if it is not listed on a recognised exchange its head office must be in Gibraltar.
In 2005, Gibraltar introduced Experienced Investor Funds under the Financial Services (Experienced Investor Funds) Regulations, 2005. These are funds designed for professional, high net worth or experienced investors. The 2005 Regulations were replaced with Financial Services (Experienced Investor Funds) Regulations 2012, which came into effect on April 12, 2012.
The new Regulations include a revised definition of an administrator, including administrators established within the EEA and from jurisdictions approved by the FSC in conjunction with the Finance Minister. Under the new regulations, funds may be administered outside of Gibraltar, thus allowing funds that would previously not have considered Gibraltar to be domiciled on the island.
See a full description of this and other fund regimes provided by Gibraltar law firm Hassans.