By Vlad Cuc, specialist in company formation matters
How to start a hedge fund in Hong Kong
Investors who want to open a hedge fund in Hong Kong
must observe certain rules and regulations regarding the set-up process and management of the fund. The city is a leading Asian center for fund management
which is internationally recognized for its favorable tax environment
Foreign investors in Hong Kong
who choose to become hedge fund managers
can request the services of a professional consultant and those of our company registration consultants in Hong Kong
for assistance regarding the legal aspects and regulations.
The video below shows how to set up a hedge fund in Hong Kong:
Hong Kong hedge fund structure
A hedge fund in Hong Kong
is structured according to its target investors. The fund itself can be set up as a limited partnership
and it can be managed by an investment manager
(individual or company). Common types of hedge funds
- the simple fund;
- the mutual fund.
Approval from the Hong Kong Securities and Futures Commission (SFC) is needed before engaging in such activities and investors who want to open a hedge fund need to obtain specific licenses. Fund management firms will also have to obtain licenses for their sub-managers or other individual representatives.
Options for investors in Hog Kong
The taxation of the hedge fund will depend on its structure and on whether or not the management company is also based in Hong Kong or it is in a neutral tax jurisdiction. The Securities and Futures Ordinance in Hong Kong regulates the capital requirements for hedge funds: usually, a company that has received license to manage a fund will need a paid-up capital of 5,000,000 HK$ and will also need a minimum liquid capital.
The managing company will need to appoint two responsible officers/representatives who will need to obtain approval from the Securities and Futures Commission. In some cases the authorization for the fund may not be requested by the SFC, however, this only applies if the fund is marketed to professional investors.