Abstract
It is important to understand the fundamental differences between the fund and the management entity. The fund is the legal entity where the assets will be held and where the investors will invest. It is generally based offshore (e.g., Cayman Islands and British Virgin Islands) for various reasons including legal flexibility and tax neutrality. In comparison, the management entity is the business, that is, the entity that’s hired by the fund to manage the assets and the entity that hires the people who are managing the fund’s assets on a day-to-day basis. The management entity is generally based onshore (e.g., Hong Kong and Singapore) and will be licensed by the relevant regulator.
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Notes
- 1.
See Chap. 10.
- 2.
See Chap. 6.
- 3.
There have been a number of initiatives launched in recent years to allow open-ended fund companies to be based in Hong Kong. Whilst there are a number of hurdles that need to be solved before such entities become more common (e.g., tax, custody rules), there is positive momentum. A good overview is provided by the FSTB Consultation Conclusions, “Open-ended Fund Companies”, Financial Services and the Treasury Bureau, http://www.fstb.gov.hk/fsb/ppr/consult/doc/ofc_conclu_e.pdf
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Arslanian, H. (2016). Location: Where to Set Up Your Hedge Fund Business?. In: Entrepreneurship in Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-43913-6_4
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DOI: https://doi.org/10.1007/978-3-319-43913-6_4
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