An AIFMD passport is a legal mechanism that allows fund managers in Europe to market their funds throughout the European Union (EU) by registering with their home member state and notifying the host state regulator.
With an AIFMD passport, fund managers can market their funds to any professional investor in any country within the European Economic Area (EEA) without worrying about local private placement regimes. However, to obtain an AIFMD passport, a fund manager must have a European-domiciled AIF and a European-domiciled AIFM. This mechanism is considered the most facilitative, but it also requires consideration of the costs involved, depending on the level of interest from Europe.