Wednesday, November 15, 2017

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.

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