Anguilla Mutual Fund Basics

There’s a lot to love about the Caribbean island of Anguilla, which boasts the beautiful, white sand beaches, warm waters, and temperate climes typical of the region. What some are more interested in, however, is the fact that Anguilla lacks direct taxation on either individuals or corporations (aside from the Interim Stabilization Levy introduced in 2011).

This makes Anguilla a popular choice for those seeking ways to protect wealth for future generations, whether they choose to put money into trust structures, or opt to pursue investments.  For those seeking both investment opportunities and security, mutual funds can provide an attractive solution.

Of course, any time you elect to perform financial transactions outside your country of origin, it’s best to understand the process, including your rights and obligations, as well as the benefits you stand to gain.  Before you move your money into mutual funds in Anguilla, here are a few basics that should help you to make a wise financial decision.

The Mutual Funds Act

Introduced in 2004, the Mutual Funds Act is designed to govern the setup and administration of mutual funds operating in Anguilla.  Whether you’re interested in starting a mutual fund or simply investing in one, the fund must abide by the rules set forth in this act.

The Mutual Funds Act not only dictates rules and regulations related to managers and administrators, but also to the different types of mutual funds operating in Anguilla.  The types of funds covered by this act are private, professional, and public funds.

Private Funds

Before you engage in offshore banking and investing in Anguilla, you need to understand the different types of mutual funds available to you.  The first type is a private fund, and there are two main characteristics that differentiate this fund from other types.

First, shares in a private fund cannot be offered to the public, as implied by the name.  This doesn’t necessarily limit the amount that investors can put into this type of mutual fund, only the number of investors included.

This brings us to the second point.  A private mutual fund is limited to 99 investors.  If there are more than 99 investors, it is no longer considered a private fund and is therefore subject to different rules.

There are exemptions granted for family trust funds that fall into this category, but you should speak with your preferred trust company to make sure you understand all the ins and outs of these special circumstances before you make a commitment.

Professional Funds

This fund is characterized by the type of investors included, which is to say, professional investors only.  Unlike private funds, there is no limit to the number of investors that can join, but each investor must contribute a minimum of $100,000 (US dollars, or equivalent in other currency) to the fund.

There are two ways to be considered a professional investor for the purposes of joining a professional fund.  Members must either manage investments professionally or they must have a net worth (single or jointly, if married) of over $1 million (US dollars, or equivalent in other currency) and agree in writing to be treated as a professional investor.

If you’re not sure what being treated as a professional investor entails, speak to your offshore trust company in Anguilla to make sure you meet all requirements and you are prepared for the differences (as opposed to being treated as a private investor).

Public Funds

This type of fund is easily the most inclusive, with no limits on the number of investors or set minimums for investment amounts under the Mutual Funds Act.  Further, shares in public funds are offered to the public.

Public funds must file a prospectus detailing the name and the nature of the fund in order to avoid misleading information and gain recognition by the Anguilla Financial Services Commission.  In addition, they must maintain account records and submit annual audits of accounts to the Commission.

How to Get Started

Investing in mutual funds in Anguilla should begin by finding a reputable company management company to handle your business.  The professionals at these companies can help you to understand all you need to know to choose suitable mutual funds in Anguilla to meet your investment needs.

MUTUAL FUNDS REGULATIONS OF ANGUILLA
MUTUAL FUNDS ACT

For more information regarding mutual funds, get in touch with us at 1-264-461-8800 or info@firstanguilla.com.

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