Best Countries for Setting Up Hedge Funds

Investors who want to set up a hedge fund will look for jurisdictions that offer tax advantages and sound market regulations. There are a number of jurisdictions worldwide that are commonly referred to as “tax haven” and what these countries offer is a favorable environment for setting up a fund and generating more profits. Here are some of the best countries for setting up hedge funds.

Why the hedge fund jurisdiction matters

Hedge funds are a type of fund suited for long-term investments that offer flexibility because they allow investors to engage in various investment strategies. A key characteristic is that this type of fund is managed by an investment manager. The process of setting up a hedge fund will differ according to the chosen jurisdiction.

Many international investors choose to set up their hedge funds in offshore locations because of tax neutrality and other fiscal advantages. Luxemburg is one of Europe’s smallest countries and also a well-known fund domicile in the EU.  The country offers economic stability, a very well developed financial sector, and low taxes. You can find out more information on how to start a hedge fund in Luxembourg from a local expert or a tax lawyer.

Countries suited to hedge fund creation

Investors have access to a large number of offshore fund locations, in Europe, Asia, the Middle East or the Caribbean just to name a few. Investors who want to set up funds in Europe can do so in Luxembourg or Switzerland. Opening a hedge fund in the Netherlands is another advantageous option because of the country’s strategic location in Europe and its recognized tax advantages for setting up an international business. Among other EU hedge fund destinations, we can mention Malta, whose attractiveness as a hedge fund domicile is primarily focused on its flexible fund market and a well-established regulatory framework for these types of investment structures. Setting up a hedge fund in Malta is straightforward and investors have numerous options.

The hedge fund is a type of fund that has high investment return and, when based in a favorable jurisdiction, it can become an efficient investment structure.

Setting Up a Company in Switzerland

Switzerland welcomes foreign investors and the country is a popular location for international company headquarters in Europe. Some of the main reasons to invest in Switzerland include a stable economic and political environment, a well-established and transparent legal system, good infrastructure and developed banking and financial sectors.

The process of setting up a company in Switzerland is a simple one and investors benefit from various tax incentives at a cantonal level.

Types of companies in Switzerland

The main types of companies in Switzerland are the corporation (AG), the limited liability company (GmbH), the partnerships and the branch of a foreign company.

The corporation is a widely-used business form that requires a minimumm share capital of 100,000 CHF, with a minimum share value of 0,01 CHF. The Companies Law requires that at least 50% of the capital or 20% of the nominal value of each share (whichever has the highest value) needs to be paid by the date of the first shareholder’s meeting.

Requirements for company registration and management in Switzerland

Investors who want to start a business in Switzerland need to follow a few steps for company incorporation:

-          choose the type of company and an available business name;

-          open a bank account and deposit the paid-up capital;

-          draft the company’s Articles of Association;

-          file the registration documents and forms with the Commercial Registry;

-          register for VAT purposes;

-          register with the Cantonal Social Security Office;

The taxes for companies in Switzerland are levied at a federal and cantonal level. Companies need to observe the applicable tax rates and the requirements for tax filing and annual reporting. Companies observe the Swiss Generally Accepted Accounting Principles (GAAP) and they are subject to audit if they meet two of the following three criteria: balance sheet of 20 million CHF, 250 full-time employees and/or a revenue of 40 million CHF.

Investors who want to open a company in Switzerland are advised to seek professional legal assistance for the entire company registration procedure from our reliable partners - Experten in der Firmengründung Schweiz.

Starting a Business in... China

Foreign investors all over the world have the opportunity to enter the Chinese market, one of the most important in the world, and have access to a market of 1.3 billion consumers. China is the second largest economy in the world and offers the possibility for foreigners to open a special type of company - the wholly foreign owned enterprise (WFOE). The share capital of this company must be provided by the foreign citizen(s)/ legal entity(s) that are founders of the Chinese WFOE.

The foreigners are allowed to take the profits out of China, in their resident countries. They don’t have access to all the economic fields in China, there are some restrictions, but other sectors of the economy are largely opened to foreign investments, such as new technology and equipment, the development of new products or energy preservation etc.

WFOE is a sort of limited liability company and it is a legal entity that can be used for different business purposes. There is a law that regulates the activities of WFOEs in China and, if you need more information about that, you may contact our local lawyers. The minimum share capital for this type of company is different according to field of activity chosen by the investor. 

Other types of entities that can be set up by foreign entrepreneurs in China are: partnerships, representative offices, Hong-Kong or Shanghai free-trade zone companies. The companies opened by foreigners in China must be registered with the State Administration for Industry and Commerce and obtain an approval for operation from the Ministry of Commerce. 

Set up a Car Rental Company in Romania

The local and foreign investors who want to set up a car rental company in Romania must follow a few legal steps for incorporation and they should know that the procedure has been simplified in the last years. The Trade Register functions as a “one-stop” registration office and the incorporation procedure lasts only a few days once all the required documents are submitted.

The entrepreneurs must first decide the type of company they want to open in order to offer car rental services in Romania. The most common types are limited liability company (SRL) for small businesses and joint stock company (SA) for large ones. A foreign investor who wants to set up a company in this field can give the power of attorney to a local lawyer who will be in charge with all the company formation aspects and will provide legal assistance for starting the business. The local attorney will inform you about the special license or permits necessary for your company.

The car rental industry in Romania has developed in the last years and it is expected to grow as the economy is on a positive trend and the number of foreign tourists coming to Romania has increased year after year. Car rental sector increased by 12% in 2015 compared to the previous year due to the large number of foreign tourists who visited our country. A part of the businessmen who invested in this field have targeted also the local citizens interested in renting cars in major Romanian towns. The prices for this service are low comparatively to other European countries or exotic destinations like Dubai (http://www.rentluxurycarindubai.com), so this business has a high potential of growth in the next years. 

For more information about opening a car rental company in Romania, you may contact our lawyers who will present you the entire procedure of company formation and the list of required documents. 

Dutch Company Formation Services in German

As a German speaking person it might be hard to find a Company Formation Specialist in Netherlands for the formation of your company. In this case we recommend our partners INCO GROUP which can assist German nationals in establishing Dutch companies.
Please access the following link:
http://www.companyformationnetherlands.com/de/firmengruendung-in-niederlande

Opening a Company in Hong Kong

Hong-Kong is one of the most famous offshore jurisdictions in Asia and even the world. Businesses setting up there can enjoy easy access to the Chinese market and low tax (or no tax) for their corporate income. Hong-Kong is especially useful when expanding your business in an Asian country as a good location for a holding company. Opening a company in Hong Kong can be done quickly with low costs and a maximum of privacy.

If you want to know more on the basic procedure for establishing a company in HK please see: http://www.cr.gov.hk/en/home

For more general info on foreign investment in Hong Kong please access http://www.censtatd.gov.hk/hkstat/sub/sp260.jsp?productCode=B1040003.