The Isle of Man offers a full range of vehicles for use as fund structures. Companies can be established under the more traditional Companies Act 1931 or the more flexible Companies Act 2006, which offers a stand-alone vehicle with minimal administrative requirements, flexible capital structure and limited disclosure requirements. Both types of company can be established as protected cell companies or ("PCCs"). PCCs are ideal for use in both multiclass/single manager structures and in multi-manager offerings. 

Isle of Man limited partnerships offer tax transparency and a flexible legal framework. A limited partnership may return capital prior to the winding up of the partnership. Furthermore, in order to provide comfort to investors, the statute sets out a “whitelist” of activities that will not result in limited partners being regarded as involved in the management of the partnership, thereby prejudicing their limited liability status. 

Isle of Man trust law is similar to that of England and Wales. 

There are no regulatory restrictions on asset classes, trading strategies or leverage for a Qualifying Fund. As a result, the Qualifying Fund is suitable for any type of investment fund from traditional and long-only equity funds to hedge fund strategies and from private equity to property investment. A Qualifying Fund can obtain investment advice from any appropriate source acceptable to the governing body and its Isle of Man licensed fund manager. 

A Qualifying Fund must appoint a fund manager that is licensed by the Isle of Man Financial Services Authority or ("FSA"). In addition to performing its core administration requirements including transfer agency work, valuations, pricing and fund accounting services, the manager is responsible for ensuring that the Qualifying Fund continues to be managed in accordance with its constitutional documents and offering document. 

The Isle of Man licensed manager also has a regulatory responsibility for ensuring that the target investor requirements (see overleaf} are met, for making certain periodic reports and declarations of compliance to the FSA and for notifying the FSA of certain material events in relation to the Qualifying Fund. 

A Qualifying Fund must appoint a custodian who is entrusted with responsibility for custody of the assets of the fund. 

The custodian of a Qualifying Fund must be a different person from the manager and can either be an Isle of Man authorised person or be licensed to provide the custody services required in another jurisdiction. The governing body is required to ensure that each custodian is appropriately experienced in providing services to the class of assets for which it will provide services, The manager is required to approve the custodian’s appointment. 

There is no requirement for any pre-approval to be sought from the FSA or any other body. This means that a Qualifying Fund can be launched quickly and without any risk of regulatory delays. 

Except where the fund is constituted as a unit trust, an independent non-executive director must be appointed to the board of a Qualifying Fund. In addition, there is a requirement for an Isle of Man resident director, although this may be the same person as the independent non-executive. 

The governing body of a Qualifying Fund has responsibility for ensuring that the fund complies with its regulatory requirements and, amongst other things, for ensuring that the fund's offering documents (see overleaf) are compliant and contain all material information. Along with the Isle of Man licensed manager, the governing body is responsible for ensuring that the fund is managed and operated in accordance with its constitutional documents and offering document. 

The Qualifying Fund is not intended to be a vehicle for retail investment.

Prospective investors must certify that they are sufficiently experienced to understand the risks associated with an investment in the fund in question and must fall into one of the categories of permitted investor.