In Bermuda, a partnership is the relationship between persons carrying on business in common with a view to profit. General partnerships and limited partnerships are permitted, and these can be local, exempted or overseas partnerships.

Partnerships are often used as vehicles for private equity funds, which are entities used by high net worth individuals and institutions typically to invest in the acquisition of companies.

Limited partnerships tend to be the vehicle of choice when setting up a private equity fund. This is because limited partnerships in many jurisdictions, including Bermuda, are tax transparent and are generally subject to a lesser degree of regulation than companies.

In addition, closed‐ended private equity funds in Bermuda (where the ability to redeem is only at the option of the fund and not the investor – whether a company or a limited partnership) are excluded from the Investment Funds Act 2006 (IFA) and are therefore not regulated by the Bermuda Monetary Authority. If an open‐ended private equity fund (where the ability to redeem is at the option of the investor) has fewer than 20 participants and the offer is not made to the public, then they are also deemed private and are excluded from the IFA.

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