Offshore Mutual Funds
The relative ease to establish and administer make offshore mutual funds a lucrative investment option for investors who want their returns to be tax optimized thus aid in reinvesting. European offshore jurisdictions such as Bahamas, the Cayman Islands, Bermuda and the Channel Islands of Great Britain have been the preferred choice of investors for decades.
With the recent thrust that the most large economies are giving to bring back funds operated overseas by their citizens and the uncertainties that loom on the world economy and regulation that might come into force due to the exponential growth of offshore jurisdictions in Europe, there has been a fair bit of interest in the EU market for funds domiciled in the Asia Pacific rim, owing to multiple advantages.
Clients and Fund managers are now on the lookout for spreading their geographic risk and look at diversifying their portfolio by setting up funds in other respectable locations like Seychelles, Mauritius and other jurisdictions in the Asia Pacific rim.
Seychelles has taken efforts in widening the product portfolio and is now home to internationally accepted and well-regulated Licences and Fund solutions. Seychelles is located in the Indian Ocean close to Africa, Middle East, Europe, India and South East Asia. The time zone is perfect for most international fund clients. The Seychelles Mutual Fund and Hedge Fund Act prescribes four different types of funds.
I. Private Fund
II. Professional Fund
III. Public Fund
IV. Exempt Foreign Fund
Mutual and Hedge Funds in Seychelles can be constituted as a Company, International Trust or a Limited Partnership. Effectively, Seychelles is home to 15 types of structures to set up a Private, Professional or Public fund.
|Fund Type/ Structure||IBC||CSL||PCC/SPC||LLP||Trust|
A key characteristic of a Seychelles mutual fund (as is the case with most mutual funds), is that it issues equity interests enabling investors in the fund to receive or have the right to receive a portion of profits or gains derived from the investments during the life of the fund. A mutual fund in the Seychelles can include an umbrella fund whose equity interests are split or segregated into different funds or sub-funds or a pure hedge fund. Auditing of accounts of Seychelles funds may be done by approved overseas auditors also. Seychelles allows licensed Fund Administrators from other jurisdictions and is relatively cost effective than most jurisdictions.