Offshore jurisdictions such as Ireland, Luxembourg, Cayman
and Bermuda have always competed to be the prime domicile for
the global funds industry. These funds have been managed by
investment advisers primarily located in the UK and US. But in
the April 2009 budget the UK government introduced tax changes
that enable the UK fund regime to compete more effectively with
other international structures. Ironically, in tandem with
rules to attract the funds themselves onshore, the Treasury has
introduced income tax rules that may force fund managers to
leave the UK.
The European Commission, under political pressure, has also
proposed changes that will alter the fund management industry.
On April 29 2009 it released its Draft Directive on Alternative
Investment Fund Managers, proposing the regulation of certain
fund managers of non-Ucits funds. The proposals may mean that
affected fund managers leave the UK in search of a less
intrusive and costly...