Seychelles in 2008 passed cutting edge, new (very market friendly) Fund Laws designed to encourage a significant number of Funds and Fund Managers to register in the jurisdiction over the next few years.
How does one go about obtaining a Fund License in Seychelles?
- Seychelles is a well regulated and respected jurisdiction (OECD, FATF and IMF compliant)
- The progress and growth of the jurisdiction has been very steady over the past 14 years (averaging 10% + growth every year)
- The laws in Seychelles are extensively researched in that comparable jurisdictions laws are considered at length before new laws (creating new or improved products/services) even hit the drawing board
- Seychelles is very politically stable (no threats of political riots etc as the standard of living is very high)
The Seychelles as an Offshore Jurisdiction is very favorable in that:
- Seychelles has a very stable, democratic AND tolerant society
- The country pays its own way and is not dependent on others for financial assistance
- Seychelles is an independent country and not beholden to any super-power such as US, UK, Aus, EU etc
- Seychelles Financial Services Sector is extremely efficient, ethical and competent
The Seychelles Mutual Fund Act itself is very favorable in that:
- Investors are well protected (eg the Authority can take action to protect investors’ interests as required)
- It’s an easy Act to understand
- Seychelles is a well regulated well respected jurisdiction
- The new Act is an enabling law- it is designed to ATTRACT new Funds, not to tighten the regulation of existing funds
- A lot depends on negotiation with the Regulator – there’s not many places where your Seychelles agent can literally knock on the office door of the Head of the Mutual Fund Regulator and ask for a personal meeting
- Seychelles is based in a very favorable timezone at +4GMT which gives Seychelles overlapping contact with the business days of Australia, Asia, UK and Europe
- Privacy is guaranteed by law – the Mutual Fund Authority in Seychelles is prohibited by law from disclosing anything to do with its activities to 3rd parties.
- Seychelles has excellent facilities in terms of Service Providers, Communications, Hotels, Service Businesses etc
- Much depends on the quality of the application, the applicants and the professional reputation of the local service provider representing the applicant (in your case any such application would be presented by a firm owned and managed by an International Lawyer, which can only be to your benefit)
- The Regulator has true flexibility in determining whether to grant a license or not to a particular applicant, meaning that each application will be treated individually on its own particular merits.
Licensed Fund Choices in the Seychelles
There are three kinds of Licensed Fund that one can set up in Seychelles, a Public Fund, a Professional Fund and a Private Fund. The essential differences and distinctions are as follows:
- A Public Fund is one which is designed to be mass marketed. As it is aimed at the general public a very detailed Offering document must be given to and approved by the Authority before a license is granted. (The authority needs to be sure that all plans and risks of the fund are disclosed upfront to the investors).
- A Professional Fund is one aimed at qualified/sophisticated Investors. Minimum investment is $100,000 and only qualified investors can invest (ie in the case of an individual, the investor must have a net worth of at least one million USD). Unlike a Public Fund one does not need to file a finely detailed Offering document prior to receiving License approval.
- A Private Fund is one aimed at the Professional Adviser looking to gather together a consortium of investors from his/her client database. It is limited to 50 investors only. No minimum or maximum investment is required. Again, unlike a Public Fund one does not need to file a finely detailed Offering document prior to receiving License approval.
A Private Fund is probably the most suitable kind of Fund structure for Traders looking to spread their wings and for aggressive Asset Managers. The limitations are as follows:
- Limited to no more than 50 investors (though there’s no limit on replication of the licensed fund model itself)
- The constitution documents of which must specify that an invitation to the public to subscribe for shares is prohibited.
- Not permitted to be able to be registered as a licensed managed investment scheme in “onshore jurisdictions”, such as would otherwise be possible with a Licensed Public Fund
How to Register as a Private Licensed Fund
The process for applying for registration as a Fund in Seychelles is quite simple and streamlined (in particular compared to competitor jurisdictions eg Caymans, BVI etc, and has been deliberately designed to be so in order to forthwith begin attracting business). Any proposed application, would likely not be subject to delays as may otherwise be the case in a jurisdiction other than the Seychelles.
Offshore Licensed Fund Establishment Services Outline
Should you be interested in going down the path of registering a Licensed Managed Fund we can assist with all or any of the following:
- Providing detailed advice on the application process and legal requirements
- Drafting and/or Settling of Fund License Application, Offering document/s, etc
- Creation/Incorporation of the Fund Entity
- Incorporation of a Trading Company entity
- Incorporation of an Investment Manager
For more information on this topic (or if you would like to know more about How We Can Help You) please Contact Us