Mainstream jurisdictions and structures for overseas fund establishment
The world’s most mainstream offshore fund registration place。Main structures include exempted limited partnerships(ELP)and independent portfolio companies(SPC)。ELPs are commonly used in private equity and venture capital funds，SPC has the legal segregation characteristics of assets and liabilities between each investment portfolio.，Widely used in hedge funds and umbrella funds。Subject to the Cayman Monetary Authority(CIMA)supervision。
Known for its high cost performance and flexibility。Suitable for start-up funds and small and medium-sized private equity。Common structures include incubator funds(Incubator Fund)and approved funds(Approved Fund)，These two types of funds enjoy audit and administrator exemptions at the initial stage of their establishment.，Suitable for asset management scale(AUM)Smaller funds or funds with a limited number of investors。
variable capital company(Variable Capital Company, VCC)It is a corporate structure specially designed for investment funds in Singapore.。Supports open-end and closed-end funds，Allow multiple sub-funds to be placed under a single VCC，achieve economies of scale。Required by the Monetary Authority of Singapore(BUT)Managed by a licensed or exempt fund manager。
Hong Kong offers open-ended fund companies(OFC)and limited partnership funds(LPF)Two onshore structures。LPF is designed specifically for private equity funds，Easy registration process，No minimum capital requirements；OFC applies to public offerings and private placements，Subject to the Securities and Futures Commission of Hong Kong(SFC)supervision。Both can enjoy Hong Kong’s unified fund tax exemption system(UFE)。
Advantages of establishing overseas funds
Offshore jurisdictions such as Cayman、BVI) generally does not cover capital gains of fund entities、Dividends and interest are subject to direct tax。Onshore structures (such as Singapore、Hong Kong) through specific tax exemption schemes (such as Singapore 13O/13U，Hong Kong UFE)，Tax neutrality at the fund level can also be achieved，avoid double taxation。
Overseas funds’ investment targets、Extremely high flexibility in leverage ratios and concentration limits。In addition to traditional equity、debt、Outside real estate，You can also invest in Web3.0 legally and compliantly、cryptocurrency(Cryptocurrency)、Alternative assets such as art。
Most offshore fund domiciles do not require public disclosure of limited partners(LP)or investor’s identity information。Fund's financial statements、Private Placement Memorandum(PPM)and internal resolutions usually only need to be filed with the regulatory agency，No need to disclose to the public，Protect investor privacy to the greatest extent。
cayman、The fund structure and legal system in Singapore and other places (mostly based on common law) have been adopted by global institutional investors.、Widely accepted by family offices and high net worth individuals。A mature legal framework reduces investors’ due diligence costs，Conducive to global fundraising of funds。
Compliance and regulatory requirements for the establishment of overseas funds
When setting up overseas funds，Full consideration must be given to the Economic Substance Act of each jurisdiction., ESA）。For example，The Cayman Islands and BVI require entities engaged in “fund management business” to meet local Core Income Generating Activities (CIGA) requirements，However, the investment fund entity itself can usually apply for an exemption。also，The fund’s private placement memorandum (PPM) must be drafted by a professional lawyer，Clearly disclose investment strategies、risk factors、Conflicts of Interest and Fee Structure，To meet local financial authorities (such as Cayman CIMA、Singapore MAS、Hong Kong SFC) regulatory bottom line。Hong Kong Xintong's legal team will assist you throughout the entire process to complete the establishment and declaration of compliance structure。
Information required for overseas fund establishment
Including fund sponsors、director、general partner(GP)and investment manager’s identification (passport)、Proof of address (utility bill within the past 3 months)、Resume(CV)、Certificate of no criminal record and statement of source of funds。
Specify the name of the fund、Duration、target size、Minimum subscription amount、management fee、Performance sharing(Carried Interest)、investment strategy、Core business elements such as lock-up period and redemption terms。
Includes private placement memorandum(PPM)、limited partnership agreement(LPA)or articles of incorporation(M&A)、Subscription Agreement(Subscription Agreement)and investment management agreement(THERE IS)。These documents need to be drafted by Hong Kong Information Communications and local licensed lawyers.。
Overseas funds usually need to appoint independent third-party service agencies，including fund administrators(Fund Administrator)、auditor(Auditor)、Compliance officer(AMLCO/MLRO)and custodian bank。A letter of intent or service agreement from relevant institutions is required.。
Application process for overseas fund establishment
Hong Kong Xintong compliance experts have in-depth communication with customers，Evaluate fundraising targets、Investment target and tax residence status，Determine the best jurisdiction (such as Cayman、BVI or Singapore) and fund entity type (e.g. ELP、SPC or VCC)。
Submit an application to your local Companies House，Incorporation of a fund entity (such as a Cayman exempted company or limited partnership) and a general partner(GP)Corporate/Investment Management Company，Get a registration certificate(CI)。
Based on firm commercial terms(Term Sheet)，Hong Kong Xintong legal team drafts PPM、LPA、A complete set of legal documents such as subscription agreement，And confirm the final version with customers and service providers。
Submit the finalized legal documents and KYC information of directors/GPs to the local financial regulatory agency (such as Cayman CIMA)。Pay statutory registration fees，Waiting for regulatory approval and issuance of fund license or registration certificate。
With fund registration certificate and regulatory approval，Hong Kong Xintong assists funds in opening capital accounts at internationally renowned banks or securities firms、Operating account and securities trading account，Complete account opening KYC review。
The fund officially enters the fundraising and investment stage。Hong Kong Xintong provides subsequent FATCA/CRS declarations、economic substance(ESA)annual return、CIMA annual filing and AML compliance officer appointment and other ongoing maintenance services。
Frequently Asked Questions about the Establishment of Overseas Funds(FAQ)
ELP (Exempt Limited Partnership) is a contractual structure，by the general partner(GP)manage，limited partner(LP)Contribution，Commonly used in closed-end private equity(PE)and venture capital(VC)fund。SPC (separate portfolio company) is a corporate structure，Allows multiple independent investment portfolios to be established under the same company(Segregated Portfolio)，Assets and liabilities between portfolios are completely legally segregated，Commonly used in open-ended hedge funds or umbrella funds。
The establishment period depends on the jurisdiction and the complexity of the fund structure。Generally speaking，The BVI Incubator Fund can be completed in as little as 4-6 weeks；Cayman ELP or SPC Fund from Structure Design、Document drafting to CIMA filing completed，Usually takes 8-12 weeks；Singapore VCC or Hong Kong OFC due to stricter local licensing requirements，The cycle may last 3-6 months。
Most offshore jurisdictions such as Cayman、BVI) There are no statutory minimum paid-up capital requirements for fund entities。The initial capital of the fund can be very low (e.g. $1 or $100)。But in order to meet the actual operation、Pay the upfront establishment fees and open a bank account requirement，It is recommended that sponsors prepare sufficient start-up capital。
uncertain。In Cayman and BVI，If the fund manager only provides management services to specific offshore funds，You can usually apply to register as an “exempt fund manager” (such as Registered Person in Cayman or Approved Manager in BVI)，No need to apply for a full license。But in Singapore and Hong Kong，Fund managers must generally hold a CMS license issued by the MAS or a Type 9 license issued by the SFC (unless certain family office exemptions are met)。
Offshore funds (such as Cayman、BVI) itself is a tax-free haven，Local governments are not exempt from the fund’s capital gains、Taxation on profits or dividends。Income at the fund level can be fully distributed to investors，Investors then pay personal or corporate income tax according to the laws of their country of tax residence.，thereby avoiding double taxation at the fund level。
Under the economic substance laws of Cayman and BVI，Pure “investment fund” entities are generally exempt，No need to establish local economic substance。but，An entity that acts as a fund manager (such as a Cayman GP company or investment management company) if it is engaged in "fund management business"，must meet the economic substance requirements，Includes appropriate local office space、Personnel and operating expenses。HKIT can assist in assessment and provide compliance solutions。
Due to global anti-money laundering(AML)Tighter supervision，Overseas fund account opening review is very strict。Banks and securities firms will focus on reviewing the PPM of funds、AML/KYC Policy、Source of funds and background of investors。Hong Kong Xintong maintains long-term cooperation with a number of international friendly banks and securities firms，Can provide pre-examination and account opening assistance for funds established in compliance with regulations，Significantly improve account opening success rate。
The vast majority of regulated overseas funds (such as Cayman CIMA registered funds、Singapore VCC) must appoint locally recognized independent auditors to conduct financial audits every year，and submit audit reports to regulatory agencies。Some lightweight funds (such as BVI incubator funds) can enjoy audit exemption in the early stages of establishment.，However, an audit is still required when the AUM exceeds the legal threshold。
Can。The Cayman Islands and BVI are currently the most popular domiciles for cryptocurrency funds in the world。Establishing crypto funds requires full disclosure of the high volatility of digital assets in the PPM、Custody risk and smart contract risk，And it is necessary to hire a professional service organization with experience in crypto asset auditing and administrative management.。Hong Kong Xintong has rich experience in architecture construction in this field。
Annual maintenance costs mainly include：Government registration fees and regulatory annual fees、registered agent(Registered Agent)and registered address fees、Fund administrator(Fund Administrator)service charge、Independent auditor fees、AML Compliance Officer(AMLCO/MLRO)Affiliation fee、FATCA/CRS annual filing fees and economic substance(ESA)filing fee。The specific amount depends on the size of the fund and the frequency of transactions.。
The winding up of the fund must comply with local company law or partnership law。Usually the process includes：The board of directors/GP makes a liquidation resolution、Liquidate and distribute any remaining assets to investors、close bank account、Apply to the regulatory agency (such as CIMA) to cancel the fund license，Finally submit a voluntary winding up application to the Companies Registry。Direct abandonment of funds without legal liquidation will result in directors/GPs facing serious legal liability and fines。
