Bermuda: Investment Funds - Non-Pooled Products
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Bermuda: Investment Funds - Non-Pooled Products

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    Bermuda: Investment Funds - Non-Pooled Products Bermuda: Investment Funds - Non-Pooled Products Presentation Transcript

    • BERMUDA INVESTMENT FUNDS – NON-POOLED PRODUCTS
    • Advantages of Bermuda
      • As a “tax-neutral” jurisdiction, Bermuda is an ideal location to domicile a non-pooled investment fund for HNW’s.
      • The Bermuda government does not impose any:
        • Income, corporations or profit tax
        • Capital Gains tax
        • Tax on dividends or interest
        • Withholding tax
        • Estate duty or inheritance tax on shareholders (other than Bermuda residents)
        • Exchange controls (for exempted companies)
    • Segregated Accounts Companies
      • Segregated Accounts Company Act, 2000
      • A single company is permitted to create multiple “segregated accounts” in order to segregate the assets and liabilities attributable to a particular class or series of shares.
      • Assets and liabilities of each “account” held exclusively for the benefit of the account holder and counterparty linked to that account.
      • Avoids need to create separate companies.
    • Segregated Account Companies
      • Accounts are not separate legal entities but are given statutory protection. No recourse to other accounts.
      • Each investor receives a separate class or series of shares reflecting their investment.
      • Investor places funds in a segregated account which are then invested in a tailored investment portfolio of underlying funds.
      • Administration and investment management typically outsourced to third party service providers.
    • Segregated Accounts Company
      • Advantages of SAC’s:
        • Legislative framework for asset protection
        • Strong foundation in corporate law –i.e. concept of “shares” is universally understood
      • Disadvantages:
        • Legal concept of a SAC is not well-known and not tested in the courts.
        • Distribution of shares must comply with local securities laws.
    • Trusts
      • Strong legal framework in Bermuda for trusts.
      • Bermuda Trust (Special Provisions) Act , 1989 provides asset protection to certain trusts – e.g. no “forced heirship”.
      • Can provide an ideal platform for a non-pooled investment product – master/feeder - trust/sub-trust structure
    • Trusts
      • Advantages of trusts:
        • Flexible structure
        • Asset protection – use of individual sub-trusts
        • Confidentiality – no public record
      • Disadvantages:
        • Trusts not well-understood in some countries – e.g. civil law jurisdictions
        • Investors don’t “own” anything - i.e. no shares issued
    • Questions?
      • Note:
      • While the information in this presentation is believed to be accurate, it is general in nature and should not be construed as legal advice.
              • Sarah Moule
              • Appleby
              • 1-441-298-3291
              • [email_address]