Bahamas SMART fund business solution in 2023
Since 2003, Healy Consultants has been assisting international investment Firms to register fund management vehicles in the Bahamas and other jurisdictions. The Specific Mandate Alternative Regulatory Test Fund (SMART Fund) has proved to be a very attractive solution for investment management vehicles, thanks to the flexible compliance and legal obligations of Bahamas.
Why SMART funds?
A Bahamas SMART fund is a unique asset management solution for our multi-national Clients who are interested in benefitting from its flexible legal and corporate structure, otherwise involving complex incorporation procedures in other jurisdictions.
Advantages of Bahamas SMART funds
- No requirement to prepare an Offering Document. Only a simple Term Sheet is needed. Further, there are no specific regulatory requirements for licensing SMART funds in Bahamas;
- Complex fund structures enjoy i) pre-defined incorporation steps and ii) optimized licensing timelines;
- Simple majority of investors can remove fund directors, negating governance risks;
- Diversified management of family assets, that can be separated as investment cells, managed by different asset managers;
- Exemption on annual audit obligations is possible for SMART fund types 1 and 5, if waived by all investors;
- Because The Bahamas Securities Commission allows “open architecture” of business structuring, investors have access to innovative structures otherwise inaccessible in other jurisdictions.
Best uses of Bahamas SMART funds
- The SMART Funds Programme allows for a time-efficient process, suitable for new and inexperienced investors;
- Fund managers keen on creating tailored and innovative vehicles will have a higher chance of license approval under this programme.
- A Bahamas SMART fund is a flexible solution for global investors interested in innovative asset management structures, otherwise involving complex incorporation procedures in other jurisdictions.
Types of SMART funds
There are six core types (models) of smart investment funds in Bahamas, including:
- Bahamas SMART Fund 001: This structure represents a collective investment scheme limited only to the discretionary managed Clients of regulated financial institutions;
- Bahamas SMART Fund 002: Tailored private investment company with a maximum of 10 qualified investors. The majority of qualified investors can freely appoint and remove the fund’s operators (i.e., general partners, directors);
- Bahamas SMART Fund 004: represents a private investment company with a maximum of 5 investors with no requirement to appoint a fund administrator;
- Bahamas SMART Fund 005 is an investment fund with a maximum of 5 qualified investors and may not require licensing from the Securities Commission as fund administrator;
- Bahamas SMART Fund 006: Allows the creation of a side fund for non-liquid assets, which can be transferred into another SMART fund;
- Bahamas SMART Fund 007: This vehicle can be created by a single investor but allows a maximum of 50 investors to have an equity interest in the fund. There is a minimum investment of US$500,000 and license requirement in all cases.
Other considerations table
|SMART FUND 1||SMART FUND 2||SMART FUND 4||SMART FUND 5||SMART FUND 6||SMART FUND 7|
|Annual financial statements required?||Yes||Yes||Yes||Yes||Yes||Yes|
|Annual Audit required?||Yes||No||No||No||Yes||No|
|Specific license required?||Yes||Yes||Yes||Yes||Yes||Yes|
|Licensed administrator required?||Yes||Yes||No||No||No||No|
|Custodian appointment required?||Yes, except for fund-of-funds or master-fund structures||Yes, except for fund-of-funds or master-fund structures||Yes, except for fund-of-funds or master-fund structures||Yes, except for fund-of-funds or master-fund structures||Yes, except for fund-of-funds or master-fund structures||Yes, except for fund-of-funds or master-fund structures|
|Term sheet mandatory?||No||Yes||No||No||No||No|
|Performance reports?||Every six months||Every six months||Every six months||Every six months||Every six months||Every six months|
|Qualified investors required?||No||Yes||No||Yes||No||No|
|Invoice||Inquire a proposal||Inquire a proposal||Inquire a proposal||Inquire a proposal||Inquire a proposal||Inquire a proposal|
Our total fees to setup a Bahamas SMART fund company is US$27,655 including i) Bahamas company formation services; ii) company registered agent and legal registered office; iii) government registration and SMART licensing fees; and iv) corporate bank account opening fees. Kindly refer to the invoice below for a detailed breakdown of our fees.
Let us know if you require Healy Consultants Group’s assistance to engineer a simple and flexible solution for your investment and asset management vehicles in Bahamas or any other jurisdictions.