Substance Requirements Remain Under The Fund Microscope

Guernsey Finance Chief Executive Dominic Wheatley looks at 'substance' in the funds industry and how Guernsey stacks up.

Take the EU's Alternative Investment Fund Managers Directive ("AIFMD") as an example. If you are a European fund manager or wish to market and distribute to investors in Europe, not only will you have to consider marketing and distribution matters, including which European countries you want to target for investors, you will also need to carefully consider the structure and operation of your fund to determine the appropriate location and domiciliary characteristics you require. This needs to be done both from a strategic and a tax perspective, bearing in mind that the tax treatment will depend on real issues of substance and not simply on formal legal structures.