The choice of domicile or jurisdiction for a hedge fund is a critical factor in the structuring process. It is a choice made more complicated by the bewildering array of jurisdictions all competing for market share in the offshore fund business. The laws, legal structure and local infrastructure of each jurisdiction need to be considered when choosing a jurisdiction with the perception of particular jurisdictions among target investors impacting on the decision.
When looking at European jurisdictions, consideration must also be given to the implications of the Alternative Investment Fund Managers Directive ('AIFM Directive').
When choosing a domicile the following major factors need to be considered:
- Familiarity of the jurisdiction with the category of alternative investment proposed for the fund.
- Whether the target investor market is comfortable with the domicile of the fund and with the type of fund vehicle chosen.
- Degree of local regulation.
- Local tax and double tax treaties.
- Anti-money laundering measures.
- Extent and quality of service providers.
- Convenience for holding board meetings.
- Whether the jurisdiction is within the OECD or not.
- Availability of, and ability to obtain, a listing on a stock exchange not necessarily in the place of establishment.
- Duration of local incorporation, licensing and approval processes.
- Reputation.
- Stability of the political system and currency.
- The time zone.
- Language capability.
- Costs.
- Strengths and depth of capability and systems. li>Ease of communication and accessibility.
Hedge Funds: Where and How? examines and analyses these key factors in 16 of the leading hedge fund domiciles:
- Bermuda
- BVI
- Cayman Islands
- Dubai
- France
- Germany
- Guernsey
- Hong Kong
- Ireland
- Italy
- Jersey
- Luxembourg
- Malta
- Singapore
- United Kingdom
- United States of America (Delaware)
Each chapter is written in conjunction with expert local firms with each chapter following a detailed template for ease of reference for the reader:
- An introduction to the domicile
- A summary of mandatory requirements
- Detailed exploration of the issues involved in setting up a fund
- The taxes
- The confidentiality laws
- The anti-money laundering laws
- The issues involved in setting up a local investment manager
Hedge Funds: Where and How? also includes a very useful 'At-a-glance Comparative Table', which is designed to be used as a tool in conjunction with the detailed text on each jurisidiction, highlighting the key jurisdiction variables:
- Time zone
- Local currency
- Language
- Local stock exchange
- Local service provider required?
- Types of vehicle
- Set-up cost
- Annual fees
- Set-up time
- Investment restrictions
- Share capital
- Directors' meetings
- Shareholders' meetings
- Accounts
- Confidentiality
- OECD membership
- Anti-money laundering
- Tax
Hedge Funds: Where and How? is an authoritative, unique, practical comparative guide to setting up and managing hedge funds for both banking and finance practitioners and hedge fund managers.