Why Gibraltar for Investment Funds? EIFs, Protected Cells and the New Tokenisation Regime.

Choosing the right jurisdiction for an investment fund involves more than comparing regulatory requirements. Fund managers increasingly look for jurisdictions that combine legal certainty, speed to market, flexible structuring and a regulatory framework capable of accommodating new investment strategies and technologies.

Gibraltar’s Experienced Investor Fund regime has long sought to provide that combination. Recent legislation allowing certain Gibraltar funds to issue their shares in tokenised form adds a new dimension to that offering.

A Flexible Funds Regime

Gibraltar is a common-law jurisdiction with its own established financial services framework under the Financial Services Act 2019 and associated legislation. Financial services are supervised by the Gibraltar Financial Services Commission (GFSC).

At the centre of Gibraltar’s alternative funds offering is the Experienced Investor Fund (EIF), a regulated collective investment scheme designed for sophisticated and experienced investors.

EIFs can accommodate a broad range of investment strategies and asset classes and may be established using different legal structures, including companies, limited partnerships, protected cell companies (PCCs) and protected cell limited partnerships.

A significant feature of the regime is Gibraltar’s alternative authorisation procedure, which can enable a qualifying EIF to commence operations without waiting for conventional regulatory pre-approval, provided that the statutory conditions are satisfied and the prescribed documentation is filed with the GFSC within the required period.

This can provide fund managers with an attractive combination of regulatory oversight and speed to market.

The Protected Cell Company

The PCC is particularly useful for managers seeking to operate multiple strategies or sub-funds within a single corporate structure.

A PCC can create separate cells whose assets and liabilities are statutorily segregated from those attributable to other cells and from the company’s non-cellular assets. Different investment strategies or investor groups can therefore be accommodated within separate cells while benefiting from the efficiencies of a common corporate platform.

In 2026, Gibraltar added a significant new feature to this structure: the ability for certain PCC EIFs to issue their cell shares in tokenised form.

Tokenised Fund Shares Now Recognised by Gibraltar Law

The Protected Cell Companies (Amendment) Act 2026 came into force on 30 July 2026 and creates an express statutory framework for the tokenisation of cell shares in PCCs which are, or will be, authorised as EIFs.

With the consent of the GFSC, and where permitted by its articles, a qualifying PCC may issue the shares of one or more cells as digital “share tokens”.

Crucially, tokenisation does not create a synthetic representation of an unrelated legal interest. The legislation expressly provides that the share token is a valid share certificate and that its holder is a shareholder with the same rights and obligations as a holder of the equivalent cell shares. The legal nature of the underlying share is unchanged.

The legislation also permits the relevant register of members to be maintained on distributed ledger technology. Transfers recorded through the DLT share register can constitute legally effective transfers of the underlying shares, and the framework expressly recognises the use of smart contracts and cryptographic signatures for this purpose.

This provides something increasingly important to institutional participants considering tokenisation: legal certainty as to what the token represents and how ownership is transferred.

Combining Tokenisation with Protected Cells

The combination of PCC legislation and tokenisation creates potentially significant structuring opportunities.

A single PCC can contain multiple legally segregated cells, with individual cells representing different strategies, portfolios or investor groups. Under the new framework, the cell shares of selected cells can be issued in tokenised form.

This could be particularly relevant to managers operating strategies involving private markets, real-world assets, digital assets or other investments where DLT-based issuance and administration may offer operational benefits.

Tokenisation does not, however, remove the regulatory framework surrounding the fund. The GFSC’s consent is required before tokenised cell shares may be issued, and the legislation contains specific requirements addressing investor eligibility, the DLT share register, cybersecurity, custody, wallet verification, transfers and contingency arrangements.

The result is therefore not simply the use of blockchain technology by a fund. It is a statutory framework integrating tokenisation into Gibraltar company and funds law.

Why Gibraltar?

Gibraltar’s attraction as a fund jurisdiction lies in the combination of a number of features: a common-law legal environment, an established EIF regime, flexible corporate and partnership structures, an experienced professional-services sector and access to a regulator accustomed to innovative financial-services business models.

Its relatively small size can also be an advantage. Fund promoters and their advisers are generally able to engage directly with regulators, administrators, directors, auditors and other service providers when developing a new structure.

The introduction of a statutory framework for tokenised PCC fund shares builds on those characteristics and gives Gibraltar an additional point of differentiation for managers considering how traditional fund structures can interact with distributed ledger technology.

For fund managers exploring tokenised investment structures, the question is increasingly moving from whether fund interests can technically be placed on-chain to whether the legal framework clearly recognises the resulting ownership rights and transfers.

Gibraltar has now legislated specifically for that question.

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