Are you an Online Trader (eg Trading cryptocurrency or Trading forex or Trading shares or Trading commodities/futures/options or etc)?
Have you developed a successful Trading strategy?
(Having experienced some success) are you now being asked by family and friends to trade their funds?
If the answer to all these questions (in particular, the latter question) is yes then you’re probably considering (or thinking about the possibility of) setting up some kind of Private Investment Fund.
Most “Onshore” jurisdictions make it extremely difficult for a career Trader to set up a Hedge Fund. You may be interested to know there are several ways to cost effectively set up a Fund type Company “Offshore” (including options that do not require any form of special license).
Here’s how this might be achieved:
- If your main aim is to obtain a Special License that will enable you to trade other person’s funds then a Broker’s License or a Securities Dealer’s license might be the way forward. For a summary of what a Brokerage business might look like check out this file/link FX Brokerage Structures: https://www.dropbox.com/s/hrd783n205pdzwf/FX%20Brokerage%20Structures.pdf?dl=0
Popular Licensing Options here include:
- A Seychelles Securities Dealers License – Check this file/link for an overview: https://www.dropbox.com/s/6pstxtedigpb0ep/Seychelles%20Securities%20Dealers%20License%20OVERVIEW.docx?dl=0
- A Belize Broker’s License – Check this file/link for an overview: https://www.dropbox.com/s/vrofr9vhhgcwkd3/Belize%20Broker%27s%20License%20FACT%20SHEET.docx?dl=0
- A BVI Brokers License – Check this file/link for an overview: https://www.dropbox.com/s/kkapiwyse8wyhwn/BVI%20Brokers%20License%20FACT%20SHEET.docx?dl=0
- A Vanuatu Financial License – Check this file/link for an overview: https://www.dropbox.com/s/h15jmyga764vo7x/Vanuatu%20-%20Applications%20for%20Financial%20Licenses%20-%20Requirements.pdf?dl=0
- Alternatively you could set up a Private (non-licensed) Closed End Fund. Check this link/file for details of how this might be achieved: https://www.dropbox.com/s/p92e6iveqgql4vf/Structuring%20Options%20for%20a%20Non%20Licensed%20Closed%20End%20Fund.doc?dl=0 ; or
- Another possibility would be to apply for a Mutual Fund License for the proposed business. The quickest, easiest and cheapest place to do this would be Seychelles. Check this link/file for details: https://www.dropbox.com/s/e3s6v1tp1sbfr2d/How%20To%20Set%20Up%20a%20Licensed%20Fund%20in%20Seychelles.pdf?dl=0
- Another possibility would be to utilise an IBC (International Business Company) which would be contracted to trade an investor’s money in the broker’s account under Power of Attorney. Check this link/file for details on how that can work: https://www.dropbox.com/s/8v0qmsta7f90evk/How%20To%20Trade%203rd%20Party%20Funds%20Using%20a%20PoA.docx?dl=0
- Semi licensed/regulated options include the BVI Incubator Fund & Mauritius Special Purpose Fund; Check these files/links for details:
https://www.dropbox.com/s/quu1kjc7emnpbys/How%20To%20set%20up%20a%20BVI%20Incubator%20fund.docx?dl=0
https://www.dropbox.com/s/89cm6g0mkje1tyo/Mauritius%20Special%20Purpose%20Fund%20FAQ.pdf?dl=0
- The simplest & most cost effective way to kick off a Startup Hedge Fund would be to set up a Panama PF-20 Fund. Check this file/link for details: https://www.dropbox.com/s/ypvfyb7bq1nmm28/Panama%20Private%20Funds.pdf?dl=0
Cost to set up a Licensed Entity range from circa $US15,000 (eg a for a Broker’s License) up to north of $25,000 (eg to establish a Licensed Mutual Fund).
To set up a non-licensed Closed End Fund can be done for as little as $3-5,000 (+ Bank Account set up). A BVI Incubator fund to set up costs around 15-18k. The most cost-effective Open Ended Fund Option would be a Panama PF 20 Fund which can be set up for a little as $4,000 (+ nominee Directors if required).
Non License Jurisdiction Suggestions
Given they are low regulation, boast peerless privacy laws and are cost effective places to maintain/setup such a Company (ie assuming you’d prefer to go down the non licensing road) commonly we would suggest Seychelles, Belize or Nevis as potential jurisdictions in/at which to incorporate “Offshore” such an Enterprise.
See here for details:
- Nevis – For detailed information click on this link: http://offshoreincorporate.com/st-kitts-and-nevis-offshore-companies/
- Belize – For detailed information click on this link: http://offshoreincorporate.com/belize-offshore-companies/
- Seychelles – For detailed information click on this link: http://offshoreincorporate.com/seychelles-offshore-companies/
Cost there to incorporate a Company would be:
- For a Nevis Company, including incorporation, registered/agent office service and one year’s basic admin: $1,475 . 2nd and subsequent years $1,165
- For a Belize Company, including incorporation, registered/agent office service and one year’s basic admin: $1,000. 2nd and subsequent years $690 (or $1,090 if nominees are required)
- For a Seychelles Company, including incorporation, registered/agent office service and one year’s basic admin: $1,075 2nd and subsequent years $765
Another popular place to incorporate such a business is Hong Kong. Check this link which explains why it’s so popular: https://www.dropbox.com/s/hfzo6gdlk5v0xci/Why%20Incorporate%20in%20Hong%20Kong.docx?dl=0
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
