MUTUAL FUNDS
Mutual funds in Barbados are governed by the Mutual Funds Act Cap 320B.
Advantages of locating a mutual fund in Barbados
The benefits of operating a mutual fund in Barbados include:
- licensing and sensitive information is kept confidential
- exemption from property tax with respect to transactions concerning the acquisition or transfer of shares in mutual funds
- exemption from stamp duty with respect to transactions concerning the acquisition or transfer of shares in mutual funds.
Mutual funds are entitled to:
- Hold equity interest in the form of shares and the pooling of investor funds with the aim of spreading investment risks and enabling investors in the mutual fund to receive profits or gains from the acquisition, holding, management or disposal of investment
- Invest pooled resources in securities, in accordance with the mutual fund investment policies and objectives; and
- Issue or offer for issue shares or units for sale that entitles the purchaser or holder of the shares or units:
- to receive, on-demand or within a specified period after demand, an amount representing the holders’ proportionate interests in the net assets of the mutual fund;
- to withdraw at any time part or all of the investment in the funds; and
- to withdraw, at any time, investment by submitting shares or units in the case of an open-ended fund.
Total number of Mutual Funds
As of December 31, 2021 the total number of licensed mutual funds including sub-funds was 27 (Source: Financial Services Commission).
Establishing a Mutual Fund
An application for a licence to administer a mutual fund must be made to the Financial Services Commission.
The applicant must have stated equity capital of at least US $500,000 or the equivalent in a currency approved by the Financial Services Commission.
The application fee for a mutual fund licence related company; a mutual fund – general administration licence; or a mutual fund – restricted administration licence is US $500.
The initial licence fee for a mutual fund related company or a mutual fund – general administration licence is US $5,000. For a mutual fund–restricted administration licence, it is US $2,500.
The annual licence fee for mutual fund related companies is 0.01% of assets under management. Note that the minimum fee is US $3,750 and the maximum is US $12,500. The annual licence fee for a mutual fund – general administration licence is US $2,500, while for a mutual fund – restricted administration licence it is US $1,250.