An exempt scheme is a type of investment fund that appeals to sponsors and investors seeking flexibility without unnecessary regulatory restrictions.
Unlike other vehicles that impose rigid controls on asset classes and investment limits, an Isle of Man exempt scheme can invest in virtually any asset type. This makes it a popular tool for wealth management and portfolio diversification.
Sponsors and investors benefit from the ability to design bespoke strategies tailored to their specific objectives, risk appetite, and market opportunities.
Assets held often include:
- Intellectual Property (IP): Patents, trademarks, copyrights, and other IP assets can be included, making this structure particularly appealing to technology companies, media businesses, and creative industries.
- Real estate and commercial property: From residential developments to large-scale commercial projects, exempt schemes facilitate property investments without geographical limitations.
- Art and collectibles: High-net-worth individuals and institutions can hold valuable artworks, rare collectibles, and other tangible assets within the fund structure.
- Yachts and private jets: Luxury assets such as yachts and aircraft can be included, offering asset protection and efficient wealth structuring.
- Private equity and venture capital: Investors can back early-stage businesses or acquire private companies within the exempt scheme framework.
- Traditional and alternative investments: Equities, bonds, hedge funds and commodities, can be incorporated, allowing for a truly diversified investment portfolio.
- Infrastructure: Investments may include physical assets such as transportation systems, utilities, communication networks, and projects to develop such infrastructure.
- Currencies (Forex): Currency funds or Exchange Traded Funds (ETFs) can facilitate investments in global currencies.
The absence of asset class restrictions offers numerous advantages:
1. Tailored investment strategies – Investors can customise their portfolios based on their specific objectives rather than being constrained by regulatory-imposed limitations.
2. Enhanced portfolio diversification – Access to a broad selection of asset classes helps mitigate risk and optimise returns.
3. Appealing to a wide range of investors – Whether institutional investors, family offices, or high-net-worth individuals, the scheme’s flexibility makes it an attractive option for diverse investor profiles.
4. Efficient structuring of wealth – The ability to hold multiple asset types under one umbrella enhances estate planning and asset protection.
No action should be taken on the basis of this note, nor should it be construed as amounting to tax, legal or VAT advice. Suitable, specific and professional advice should always be obtained in respect on any particular issue.
