Chinese Dilemma. Seychelles Solution

 Chinese Dilemma. Seychelles Solution

The number of High Net Individuals in China and South East Asia has been on a gradual rise. Old generation- self-made native millionaires are concerned of their wealth disbursement and cautious of external non- family business influences; their younger generation, with academic background from overseas universities is more broad minded, open to recruiting professional managers with expertise in business. The young generation is more adept and understanding of the offshore structuring and the related benefits of offshore Trusts and Foundations.

Mr. Chan is a middle aged successful Chinese business tycoon. He has owns multiple business like electronics, manufacturing goods, shipping and entertainment. Mr. Chan wants to plan his estate and arrange financial affairs over the longer term to optimize his tax exposure and enhance the long-term integrity of his assets.

structure

 

  • Mr. Chan is the Founder
  • The Foundation holds shares of underlying Offshore Holding Company
  • Offshore Holding Company holds the other group companies of Mr. Chan
  • Mr. Chan together with one other Individual(a Family Member) are  as Councilors
  • The Councilors manage & administer the Foundation
  • Foundation will have beneficiaries

Under the structure, companies currently owned by Mr. Chan are transferred to an offshore holding company. The offshore holding company holds the group companies Mr. Chan. On the top of these offshore companies, this recommended structure we will have an Offshore Foundation. Offshore Foundations are key tax exempt asset protection structures. Offshore foundation has its own legal personality. Foundation can be well mixed with offshore companies to maximize privacy, business confidentiality and to protect assets, accumulate and manage wealth.

Protector can be appointed to protect the interest of the beneficiaries. Assets of the Foundation (shares of an underlying company) will be held by the Foundation. Mr. Chan and the members of the family can be made beneficiaries and an entitlement which can also be fixed as per the wish of the Founder.

Global Funding – Abacus-Offshore

Taking your Business Global and to Global Funding

John Bickett is a serial internet entrepreneur based in Europe; with success of multiple businesses to his credit. His lines of businesses range from local cab reservations to restaurant reservations and event tickets resell to domestic holidays though the internet and mobile applications. All these businesses were doing fairly well and it was time for John to take his entrepreneur skills global.

He recently got an App built locally, that aids in managing the expenditure for living together roommates. The app lets a group of friends who share a common roof; keep track of the expenditure and split the costs among them. Considering that the youth would be biggest set of users and the biggest target for B2C advertisers; the mode of revenue was planned to be though in app display ads.

Owning to the possibility of universal consumption, that is; an app that can be used by users across the globe he was sure to garner interest from the global investor community. Basis initial discussions with a few potential investors he came across the option going offshore.

He learnt that going offshore for the business has benefits beyond saving up on taxes. Going offshore had several benefits like quick set up, low admiration costs, minimal annual paperwork; Offshore jurisdictions have minimal or close to nil taxation on worldwide income. Several offshore jurisdictions also enable listing in their stock exchanges; which can be cumbersome and may require heavy investments in mainland countries. They also have favorable Intellectual Property Rights and Transfer laws

Critical among these advantages, from an Investor perspective was the cost saving on tax that the potential investor would make if the investment is made in an offshore company. Offshore companies have simplified legal framework, optimized tax structures and enable quick transactions while keeping exposure of information limited.

Going offshore would be a win-win situation for John and his potential investors. They get taxed lesser than general. Offshore jurisdictions charge taxes in the range of nil to 17 % while mainland countries charge corporate tax in the range of 30%-45%.  Add to this the benefits of acquiring technical and business inputs from a global expert pool.

After much deliberation they set up the company in Hong Kong to attract investors from China and APAC. Today John’s app “Roomie” has investments to the tune of USD 500 million. Having understood the value and advantage of going offshore; John is today in the process of moving his other business offshore and expanding their reach to Europe and beyond.

Like John there are many innovative entrepreneurs, who are not conceptually sound of finances or international laws but want to take their businesses global and get global funding. All that is required is a little understanding and a credible international law consultant to help take your business Global.

AM. Abacus

If you have queries do write to us HERE or If you wish to discuss your specific case, fix your FREE DISCUSSION appointment HERE

Mauritius Treaty with India – The latest ratifications. Change in political scenario

Mauritius Treaty with India – The latest ratifications. Change in political scenario

The levying of Tax by two or more jurisdictions on the same declared revenue can be negated by the Double Taxation Avoidance Agreement (DTAAs) signed between the countries. With over 35 such treaties Mauritius can provide an ideal and cost effective platform for Investors looking to grow and expand their business into most of the 3rd  World.

A Category 1 Global Business Company is a tax resident company in Mauritius and can benefit from the treaty network of Mauritius. The absence of exchange controls, capital gains tax or withholding tax in Mauritius enhances further the attractiveness of the Global Business Sector of Mauritius to investors.

Like in the case of Africa, Mauritius has been one of the largest channels for Foreign Direct Investments into India. During the last financial year, India attracted $4.85 billion from Mauritius. This can be through an Indian resident company reinvesting in India or a foreign investor investing into India though Mauritius.
The convention for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and capital gains between the Republic of India and the Government of Mauritius, was undertaken to encourage mutual trade and investment.

Key excerpts of the treat from the perspective of Mauritian Tax payable by an Indian Resident company (Full view available on – sphere website link)
The amount of Indian tax payable under the laws of India and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of Mauritius, in respect of profits or income arising in India, which has been subjected to tax both in India and Mauritius shall be allowed as a credit against Mauritius tax payable in respect of such profits or income provided that such credit shall not exceed the Mauritius tax (as computed before allowing any such credit) is appropriate to the profits or income arising in India.

In the case of a dividend paid by a company which is a resident of India to a company which is a resident of Mauritius and which owns at least 10 per cent of the shares of the company paying the dividend, the credit shall take into account (in addition to any Indian Tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Indian tax payable by the company in respect of the profits out of which such dividend is paid).

The case of a Mauritian resident company trading in India would be with the inverse proposition.

Though formal trade among the two nations was in existence since the early ‘80s the impetus for business and trade growth came in with the liberal trade policies of the early 90’s and subsequently the DTAA ratification. Consequent to the DTAA between two countries there was a quick and voluminous investment that happened in India across every then possible sector.

As time passed a critical loop hole in the treaty which provisions for the investor (the Mauritian entity) to not pay Capital Gains tax in India at the time of exit was abused by multiple multinationals investing in India. And with Mauritius too taxing capital gains a lot of companies set up shell companies in Mauritius before investing in India. This aspect of the treaty was questioned multiple times by the tax officers to the Central Board of Direct Taxes (CBDT). They were of the view that these foreign institutional investors (FIIs) should be deemed to be resident of India and hence should be taxed on their capital gains from India.

As an obvious repercussion, the FIIs began retreating from the Indian markets, resulting in the dip in investments in India and consequently a slump in the Indian economy as well as the Mauritian economy as these foreign investors looked onward to Seychelles and Singapore as alternate jurisdictions.

Recently, corrective measures taken by the two countries, which has resulted in some positive business outlook. The government has asked companies registered in Mauritius to comply with the additional requirements if they want to avail of the tax treaty benefits. Mauritius has made it mandatory for the entity to have substance. Companies have the option of following any of the six rules, such as setting up an office, or employing at least one person who is a resident of Mauritius on a fulltime basis, or resolving disputes arising out of investments in India through arbitration in Mauritius.

The challenge from the Indian perspective is that once GAAR (General Anti-Avoidance Rule) is implemented in India, merely having an arbitration clause in the constitution documents might not protect these GBC1 companies. However, having a full-time employee or an office in Mauritius, or incurring expenditure within Mauritius might provide them better protection against GAAR.
The Impending Indian budget of the new government should hopefully contain schemes and policies to bring in more FDI and hence can expect the DTAA to be used very effectively.

Investing outside your country

Investing outside your country – points to consider from a legal perspective

Outgrown your home market? Saturated customer base. Dwindling profits margins. These are just few of the reasons why businesses look at overseas markets outside the comfort zone of their home markets.

Being new markets, taking your business overseas does offer the opportunity of reaping quick and large volumes of profits; but these do come with the inherent risks.

Fluctuations in exchange rates
Fluctuations in exchange rates is one of the most obvious yet high impact risk that organizations going multi-national consider. Sudden fluctuations in currency tend to hit small and mid-sized companies harder as the larger ones tend to manage to hedging the currency and the scale.

Changes in the political and social environment:
The political environment is perhaps the least predictable elements in international business. An unstable political environment leads to uncertainty and sudden changes in law and regulations which can ultimately lead to business loss. Most companies that have international presence buy political risk insurance to reduce their risk exposure.

Language barriers
Differences in Language and Culture can be huge hindrance among the native unit and the multinational organization. Difficulty in understanding the needs and wants of the superiors,peers, subordinates and customers can cause discomfort. A client or customer who is unable to understand the employees due to a heavy accent or lack of command of the language may become frustrated and take his business elsewhere.

Different legal and regulatory systems
Every nation has laws and organizations to supervise foreign investments. There are two levels of challenges in the supervision realm that is commonly faced in overseas investments. The first was that the laws and regulations of some countries are complicated.In those countries, it is easy to wander down the path of illegality if one stops paying attention for even a moment. The second was that some countries put up obstacles to investments via the legal or supervisory systems because of ideological of political concerns. Another major challenge for new overseas investment drive is a lack of experience.

Lack of understanding of investment products. Many products aboard are either completely non existent at the home country or have just emerged, whether they are swaps, hedging or stock index futures. These product or vehicles have grown complex in developed markets.One must be especially competent in handling the technical aspects, for even the slightest misunderstanding could easily result in losses. Countries are more familiar with direct investments. However, in many countries and in many industries there are no precedents to follow. Lack of experience exacts greater demands on risk management.

The next challenge is a lack of experience in project design, investment structures and negotiations. How good opportunities can be identified and projects can be developed; how effective structures can be designed to manage investments, taxes and repatriation of investment income; and how better terms and conditions to extracted from negotiations. These questions demand careful response and diligent study. Also the utmost use of highly experienced talent – lawyers, accountants and other intermediaries should be made.

Securing an occupation/residence permit in Mauritius

Securing an occupation/residence permit in Mauritius

It has been the dream of many professionals to achieve the ideal work conditions of a peaceful location, enchanting locales, growing economy, access to state of the art infrastructure, great connectivity and political stability which provides the freedom and access to the above.

Mauritius
The Republic of Mauritius has had a democratic system of government since independence in 1968. The people of Mauritius are multi-ethnic and multicultural. Most Mauritians are multilingual, Mauritian Creole, English, French, and Asian languages are used. The island is highly ranked for democracy and for economic and political freedom. Mauritius is a stable political nation and is a time tested offshore financial jurisdiction.

So how can you blend into this beautiful country with absolute ease?

OCCUPATIONAL PERMIT WITH A DOMESTIC COMPANY
The Occupation Permit (OP) with a domestic company is a combined work and residence permit which allows non-nationals to reside and work in Mauritius. You may therefore proceed with setting up a domestic company which will carry out activities that will bring value to Mauritius. The domestic company will be taxable at the rate of 15%. There is also a requirement that you should reside in Mauritius for a total of 183 days in a year to be tax resident in Mauritius. This will allow you to save on your tax liability by shifting the tax base to Mauritius.

After 3 consecutive years as an Occupation / Residence Permit holder, non-citizens may apply for a 10-year residence permit provided they satisfy the eligibility criteria under their respective category.

A non-citizen can apply for an OP under any of the following 3 categories, namely:

  • Investor
  • Professionals
  • Self Employed

OP is granted for a maximum period of three years, renewable thereafter subject to established criteria. Retired non-citizens are also eligible for a residence permit for a period of three years, renewable thereafter for a maximum period of 10 years subject to satisfying the eligibility criteria.

The following basic criteria have to be met for an occupational permit:

Investor: The proposed business activity should generate an annual turnover in excess of MRU(Mauritian Rupee) 4 million; the investor should make an initial investment of US$ 100,000 or its equivalent in freely convertible currency.

Professional: The basic monthly salary of a professional under a contract of employment should exceed MRU45,000 to be able to register in Mauritius.

Self-employed: Income from the business activity should exceed MRU 600,000 annually with an initial investment of USD 35,000 (on the basis that you are not a shareholder of the Company).

Retired: The non-citizen must undertake to transfer to his/her local bank account in Mauritius, at least USD 40,000 US annually.

Other routes to being a Mauritian National, in brief are:

OCCUPATIONAL PERMIT WITH A GLOBAL BUSINESS COMPANY
OP with a category one Global Business Company (“GBL I”) is an option available for professionals whose business activities to be undertaken are predominantly outside of Mauritius.

ACQUISITION OF PROPERTY

The Integrated Resort Scheme (IRS) is a programme designed to facilitate the acquisition of residential property by non-citizens in Mauritius. The IRS is basically a project for the development and sale of luxurious residential units to foreigners. Through the IRS, international buyers can become Mauritian residents once they acquire a luxury property on the island. The villa owner and his family are able to reside in Mauritius as long as he holds the property.

Similar residency/occupation permits can be obtained in other jurisdictions like Seychelles, Hong Kong, Malta, St Kits and Nevis, Estonia, Chile, Puerto Rico; based on your requirement and interests. For further details please write to us at enquiry@abacus-offshore.com

Offshore is not always linked to tax

Offshore is not always linked to tax

When one thinks of Offshore, tax benefits would be the first thing that comes to mind. Tax minimization and confidentiality are not the only benefits of setting up an offshore company.  Though tax effectiveness is the first and foremost benefit, there are several advantages that offshoring brings to the table.

Minimise Taxes

Depending on the Jurisdiction and the country or markets with which you want to engage with, a carefully planned company structure can help minimize the tax obligations. Non domestic companies in most jurisdictions enjoy low taxation. Corporate tax however needs to be planned well by deriving the benefits of Double Taxation Avoidance Agreements between the offshore jurisdictions and countries of business interest.

Asset protection

Offshore entities can be used for holding assets such as intellectual property or real estate investments. International Foundations and Trusts are used for asset protection and chart out as to how those assets are passed on to future generations while making them flexible, reliable and tax efficient.

Reduced administration Cost

Minimal Book keeping facilitates a substantial cost saving on staff for a paper work and even a physical office. Effectively a virtual office with the registered agent looking after your accounts is all that is required. Basis changing environment and requirement you can also re-domicile your company from one jurisdiction to the other very easily.

Lower set up and maintenance costs

The process of setting up an offshore company is usually fast and simple. This can translate into lower costs in both the establishment and maintenance of an offshore company. Registering an shore company in most countries across the world can be hassle in terms of initial capital, process and time. Registering an offshore company will require minimal capital, certain jurisdictions there is in fact no capital needed for registration. Typically most offshore jurisdictions take less than three days for incorporation; in some cases just One.

Confidentiality

Most offshore jurisdiction require only minimal book keeping. The information is not accessible to anyone. Non-domestic companies, in some countries, are not required to publish financial information or the details of directors and shareholders. Most offshore financial jurisdictions will not reveal any of this information to any third party unless criminal or terrorist activities are suspected.

Setting up an offshore company does not have to be complicated and can provide many benefits for individuals or companies involved in business across international borders. With global presence and decades of experience, AM. Abacus can be the trusted advisor to guide you on international company incorporations for the purpose of Trade, Offshore Fund management, Offshore Banking and Insurance, Wealth protection through Trusts and Foundations

Destination China

Destination China

The communist regime decided to open up to foreign investment in 1978, today China is the second largest economy by GDP, and the largest by way of purchasing power. With a population of over 1.3 billion, China plays an influential role in shaping the changing global economy. Over last three decades China has transitioned from a centrally planned to a market based economy. Multiple on-going economic reforms have enabled the Chinese economy to grow and continues to do so. Though it houses the second largest number of poor in the world after India; the year on year 10 percent GDP growth has lifted over 500 million Chinese above poverty and continues to transition more and more people from poverty to low income and low income to middle income levels.
 
Over the last three decades China has deployed its resources in multiple industries slowly moving from an agrarian economy to a manufacturing super power. Organizations from across the globe are setting up or moving their production units to China due to cost efficiencies. An estimate indicates that the manufactures in China can cut costs by between 30 and 80 percent depending on the labour intensity of the product. The entrepreneurial spirit of the Chinese and Chinese managers is also factor for consideration. Setting up manufacturing units in China also gives these organizations the geographical advantage of being closer to Asian and south east Asian markets and access to a much larger consumer base.
 
China is today not only the largest exporter of goods in the world but also the second largest importer of goods; thus becoming one of the world’s fastest growing consumer markets. It is projected that by 2015, China will become the second largest consumer market with enough purchasing power to buy 14 percent of the world’s products on a per capita income basis, China ranked 82nd by nominal GDP and 89th by GDP (PPP) in 2013; International Monetary Fund.
 
As more and more Chinese get educated and adapt to new technology and social norms one can witness the transformation in the spending patterns also. Today Online video, E-commerce, Social and Mobility are the fastest growing industries in China. China has nearly 1 billion mobile users and over a 100 million of these consumers use mobiles for online payments. China offers brands the largest expansion opportunities.
The Great Doors of China are open to welcome the world; It is up to the world to step in; the preferred Key to this door being Hong Kong.
In 1997, the British rule of Hong Kong was handed over to China and it became a Special Administrative Region under Chinese rule. Hong Kong is one of the leading International Financial Centre of the world and is strategically located in the heart of Asia and at the doorstep of China; its attraction can be attributed to excellent infrastructure and easy access to Asian Markets.
Known as the “Gateway to China“, Hong Kong is a highly investor friendly low-tax jurisdiction. Hong Kong still remains a very attractive jurisdiction for companies set up, since it applies territorial taxation, only income earned within Hong Kong is subject to corporate tax rate.
Hong Kong Companies are easy to form, maintain, and operate private limited companies in Hong Kong. With a host of international banks present in Hong Kong starting an account is a breeze. The banks have generally low transaction fees.
Incorporation of a Hong Kong company is the easiest way to get a low or zero-tax private limited company in a reputable jurisdiction.
 

Offshore in 2015

Offshore in 2015

Offshore company formation numbers in 2014 were consistent with the growth patterns of 2012 and 2013. However, there were periods of stagnation during the year owing to the multiple changes in international tax compliance. Almost all of 2014 saw the industry consolidating as per the new AML/FATCA and regional laws and regulations and as 2015 starts, the investor or the client is now better informed of the implications of starting an offshore entity for his business.

Compliance and conducting ethical business will be the way ahead that all countries trying hard to ensure that investments by its citizens do not go out of the country in a manner unhealthy for its economy. The industry image has been a constraint resulting in service providers and offshore jurisdictions working on image building exercises to showcase the industry as AML compliant tax optimization gateway rather than tax avoidance tool.

Here are few trends that we see that the industry will bear witness over 2015.

Asia Pacific Rim Jurisdictions.

Though in the news for wrong reasons the Virgin Island companies will still witness demand and growth however we do see a shift of the offshore company incorporations from the European and Caribbean jurisdictions to the Asia Pacific rim with Jurisdictions like Mauritius, Seychelles and Hong Kong along with the RAK (Ras Al Khaimah) companies in the Middle East.

China and Africa will continue to be the biggest trade markets.

China is the second largest economy by GDP, and the largest by way of purchasing power. With a population of over 1.3 billion, China plays an influential role in shaping the changing global economy. Organizations from across the globe are setting up or moving their production units to China and other parts of North Asia due to cost efficiencies. An estimate indicates that the manufactures in China can cut costs by between 30 and 80 percent depending on the labour intensity of the product.

The Great Doors of China are open to welcome the world; It is up to the world to step in; the preferred key to this door being Hong Kong.

Like China, Africa offers businesses a huge maturing market place. Seychelles and Mauritius offer an easy business gateway to the African continent. Both these are strategically located and are a convenient bridge between Europe, Africa and Asia. The convenient location and the growing list of double taxation treaties with countries including China, India, Cyprus, Africa, Sri Lanka, UAE have been major factor for the growth of these jurisdictions in Indian Ocean.

From Tax Planning to asset protection.

Larger corporations and High Networth Individuals are under the constant scanner from governments which are trying to protect their interests. The profile of clients setting up offshore entities are seeing the trend of more and more individual entrepreneurs & HNWIs (High Networth Individuals) using these vehicles to protect their assets and tax optimization rather than tax evasion

In Conclusion

We see a much better understanding by clients and careful usage of offshore companies in the years ahead. Though tax effectiveness will always be first in their minds, they are and will be seeing the larger picture of hassle free, flexibility, ease of incorporation and asset protection these offshore structures will provide.

Depending on the Jurisdiction and the country or markets with which you want to engage with, a carefully planned company structure can deliver these benefits.

With global presence and decades of experience, AM. Abacus can be the trusted advisor to guide you on international company incorporations for the purpose of Trade, Offshore Fund management, Offshore Banking and Insurance, Wealth protection through Trusts and Foundations

Seychelles Trust & Foundations

Seychelles Trust & Foundations

International Foundations and Trusts are used for asset protection, gain control as to how those assets are passed on to future generations while making them flexible, reliable and tax efficient. Should one opt for a Foundation or a Trust, depends on one’s requirement. The table below gives an indication of some of the factors one needs to consider before opting of either.

Seychelles Trust Seychelles Foundation
Initial assets required Minimum USD 1 Minimum  USD 1
Governing Law International Trusts Act, 1994 Foundation Act 2009
Currency Permitted Any Any
Incorporate Time 4-5 days 4-5 days
Cost Higher setup cost Lower setup cost when compared to a Trust.
Constitutional document Trust deed (not filed with the authorities)No names are available to public The Charter is the constitutional document of the Foundation. It details its purpose, term, appointment and removal of councillors, beneficiaries, etc.It is registered with the Authorities
Regulations detailing other internal procedures are optional an is not required to be filed with the authorities
Succession Planning Can be used for succession planning Can clearly outline the beneficiaries and hence acts as a substitute for a will while ensuring proper maintenance of the underlying assets
Duration Trusts in Seychelles can be formed for a period of 100 years
A charitable trust can be formed for perpetuity
Fixed period; or
Indefinite period
Re-domiciliation Can be challenging Permitted
Taxation Tax exempt Tax exempt for a period of 20 years in Seychelles:
Income Tax
Capital Gains Tax
Withholding Tax
Inheritance Tax
Stamp Duty
Annual Requirement Required to keep accounting records, no filing requirement Required to maintain books of accounts at the registered office
No annual filing
Local Requirement Qualified trustee Registered agent and Registered office
Restrictions on Trust/Trade Trust cannot hold immovable property in Seychelles.
It cannot own shares of domestic companies registered in Seychelles.
Settlor cannot be resident of Seychelles.Settlor cannot be sole beneficiary of Trust. An underling IBC of the trust can conduct business activities.
Unlawful, immoral, or activities contrary to public policy. Business in Seychelles
Holding immovable property in Seychelles. Underlying companies owned by a Seychelles Foundation can get benefits of DTA agreements
Confidentiality No filing with Seychelles authorities. Trust register is not accessible to public.No disclosure of names of settlor or beneficiaries to regulator required Name of the founder is stated in the charter which is filed with the authorities
Reservation of Rights Settlor of the trust cannot reserve rights A founder may reserve, in the charter or regulations, for the founder or any other person, any of the following rights, namely, the right to direct or approve the following ─a. investment activities of the Foundation;
b. amendment of the charter or regulations;
c. appointment or removal of a councillor;
d. appointment or removal of any supervisory person;

e. rights, entitlements and restrictions of a beneficiary;

f. addition or exclusion of a beneficiary;
g. proposed continuation of the Foundation as a foundation registered or otherwise established under the written laws of a jurisdiction other than Seychelles;

 

Offshore Mutual Funds

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

 

Advantage –Seychelles

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
Private
Public
Professional

 

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.

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