For managers building or scaling offshore funds, structuring choices often come down to a familiar trade-off: regulatory credibility versus administrative complexity. One option that is still comparatively underused in Asia Pacific is the BVI Approved Manager regime, which can provide a lighter-touch approach for certain offshore investment managers and advisers, subject to meeting specific conditions.
What it is
The BVI Approved Manager regime is designed for certain offshore managers and advisers seeking a proportionate regulatory route. Where conditions are met, a BVI Approved Manager is exempt from the requirement to hold a full investment business licence and is subject to lighter ongoing regulatory obligations than a fully licensed model.
Where it can be used
A BVI Approved Manager may act as an investment manager or investment adviser to closed-ended funds established in the BVI or another recognised jurisdiction, including structures such as a Cayman GP/LP model.
Key conditions (in outline)
Whilst the detail needs to be confirmed on the facts and with offshore counsel, the key conditions are:
- Size threshold: for closed-ended funds, aggregate capital commitments are below US$1 billion
- Eligible fund type: the fund meets the BVI’s definition of either a Professional Fund or a Private Fund
For Professional Fund structures, the regime typically requires that:
- Fund interests are issued only to professional investors or similarly qualified investors (for funds in a recognised jurisdiction)
- The initial investment of each investor is not less than US$100,000 (with limited exemptions, including for certain team vehicles)
Practical points
Two practical considerations are worth flagging early:
- Economic substance: under most conditions BVI Approved Managers may fall outside the BVI economic substance regime, although this should be confirmed on the facts
- Ease of process: the application process is reported to be reasonably fast and straightforward
Why it matters
For managers building or scaling an offshore platform, the Approved Manager regime can be a useful additional option in the structuring toolkit, particularly where the goal is to reduce regulatory and operational burden whilst maintaining professional standards around governance and oversight.
If you would like to discuss whether the regime could be relevant for your platform, please do get in touch.
*This article is provided for general information only and does not constitute legal or tax advice.
