This work proposes $\texttt{NePhi}$, a neural deformation model which results in approximately diffeomorphic transformations. In contrast to the predominant voxel-based approaches, $\texttt{NePhi}$ represents deformations functionally which allows for memory-efficient training and inference. This is of particular importance for large volumetric registrations. Further, while medical image registration approaches representing transformation maps via multi-layer perceptrons have been proposed, $\texttt{NePhi}$ facilitates both pairwise optimization-based registration $\textit{as well as}$ learning-based registration via predicted or optimized global and local latent codes. Lastly, as deformation regularity is a highly desirable property for most medical image registration tasks, $\texttt{NePhi}$ makes use of gradient inverse consistency regularization which empirically results in approximately diffeomorphic transformations. We show the performance of $\texttt{NePhi}$ on two 2D synthetic datasets as well as on real 3D lung registration. Our results show that $\texttt{NePhi}$ can achieve similar accuracies as voxel-based representations in a single-resolution registration setting while using less memory and allowing for faster instance-optimization.