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Startup a forex hedge fund in record time – Perfectly legal and under Eurozone Jurisdiction

Forex Hedge Fund - EurivexSuccessful traders managing to beat the market and with proven track record should seriously consider starting up their own forex/commodity or equity hedge funds, attract money from other investors and perhaps become the next billionaires as opposed to setting up a forex brokerage or an investment firm dealing in equity, bonds or forex.

Suppose you are the successful trader and you can approach and raise money from a small group of investors who trust your track record, but you are frightened by the regulatory hurdles, since we all know that even in the least developed markets, becoming involved in the financial industry and then attempting to raise money is a tough and time consuming process, which in most cases kills the entrepreneur spirit.

Should you give up? Definitely no, because we have the solution for your needs and we can get you up and running in record time, in a perfectly legal way and under EU jurisdiction allowing you to raise money from investors and managing your affairs through a flexible and tax friendly environment. Here is how it works.

A Private Fund or in legal jargon, a variable capital International Collective Investment Scheme (ICIS) will be set up based in Cyprus, which essentially means when investors enter the Fund with money, the company issues them with units and when they redeem their units and exit the Fund, those units are cancelled.

It has to be noted that the investment objectives, the composition of the owners, directors, entry and exit fees and other conditions, repayment clauses as well as administrative costs will be included in the Offering Memorandum (OM), which is essentially the legal document through which an investor enters or exits the ICIS.

The supervisor and regulator of ICIS in Cyprus is the Central Bank of Cyprus, a eurozone member central bank.

In order to setup the Fund or the ICIS, the minimum requirement is for the promoters to provide at least one shareholder who will inject the minimum capital of EUR 50.000 or USD 70.000 and will become the founding member holding the voting shares and thus absolute control, if they so wish. Other investors may be non-voting.

The ICIS also requires at least two competent directors (one of whom is preferable to be Cyprus resident for the Fund to qualify for tax benefits), a reputable Custodian Bank which will hold the assets and an independent Administrator firm which will calculate the Net Asset Value of the Fund, based on which investors will enter or exit. A regulated fund management company (such as Eurivex) may act as the overall fund manager who will then outsource the actual management to the specialist manager. Eurivex will also make sure that the EU’s Markets in Financial Instruments (MiFID) directives are applied and the Fund Manager is managing the fund according to the OM clauses.

Once the ICIS is set up, the promoters are allowed legally to approach and raise money from up to 100 investors globally and without limitation on the amount. If the Fund wants to raise money from more than 100 investors, then it stops becoming a private fund and needs to pass other procedures and become a mutual fund. The fund raising is done based on the Offering Memorandum clauses and by following strict Know-Your-Customer (KYC) and abiding by the EU’s Anti-Money Laundering (AML) rules, under Eurivex supervision and guidance.

The whole procedure is very simple and will be completed in less than 3 months. Eurivex has teamed up with the right partners to offer complete packages from how the ICIS is registered, preparing the OM, processing the application through the Central Bank, finding the non-executive Cyprus resident directors and professional firms and helping support the smooth operation of the ICIS.

By having a Cyprus based ICIS, you also get to benefit from the multiple tax advantages that Cyprus offers. The main ones are that Cyprus has the lowest corporation tax rate in Europe at 10% applied on net profits after deducting expenses, there is no capital gains tax and there is no withholding tax on dividends declared to non-residents of Cyprus by the ICIS. In most cases, dividends received from Cyprus can be repatriated back home because of the extensive double tax avoidance treaties signed by Cyprus with 50 countries including US/Canada/UK/Germany/France/Italy as well as Russia/India/Ukraine/China to name a few.

The fees for setting up and annual maintenance of an ICIS are also very competitive and reasonable. Setting up fees are about EUR 12.000 with the other costs (custodian bank, administrator, fund manager) costing about EUR 25.000 annually or 1-2% applied on the NAV of the Fund, plus external auditor and director fees. The fees are significantly lower than those applied in Luxembourg and Ireland, two other popular destinations for funds in the EU.

Disclaimer:

Shavasb Bohdjalian is an approved Investment Advisor and CEO of Eurivex Ltd., a Cyprus Investment Firm, authorized and regulated by CySEC, license #114/10. The views expressed above are personal and do not bind the company and are subject to change without notice. Investing in markets and trading on leverage is highly risky and it may not be suitable to all investors since it carries a high degree of risk and you can lose more than your initial investment.

Website : www.eurivex.com Email : Shavasb@eurivex.com