Investment funds

Almost any country in the world has a certain form of legislation on collective investments. However, the majority of those structures (funds) tend to “group” in the countries, where the legislation is fully developed. Other factors for choosing such countries are the sufficient number of experts on investment funds maintenance, the active presence of such structures and the accumulated practice. The preferential tax treatment also plays an important role, when deciding on a country.

All of those factors often lead to the high concentration of registered investment funds in particular areas. Cayman Islands are one such area. With regard to Europe – Ireland, Switzerland, Luxembourg are the most popular destinations. Of course, one can create similar structures in other jurisdictions, however, in doing so, it is necessary to personally select a balance between functionality, tax/corporate advantages, service costs and other factors.

Creating a structure for collective investment isn’t a narrow process – it involves multiple steps, among which is the formation of the different infrastructural elements, with regard to the local legislation. In addition to infrastructure issues, it is necessary to form samples of the applicable agreements between the elements of such a structure, as well as undergo the approval process with local government agencies and external service providers, such as banks and depositories.

Our experts offer some key questions, in order to select the appropriate structure and to clarify its’ essential features with the client. This allows us to compile a summary of the customer’s objectives and resources, along with information on existing opportunities, within an appropriate jurisdiction. From this point, we will be able to start creating the required structures in detail.

The foundation of the future structure is based on the following list of general points:

• 1.Type of company/fund (open/closed, do you have plans on limiting investors’ ability to enter/leave the fund at their own discretion)
• 2.Type of investors (qualified / HNWI / other)
• 3.Estimated (expected) number of investors
• 4.Estimated total amount of investment
• 5.Types of investment assets (securities/property/other)
• 6.The frequency of calculating the net asset value
• 7.Division by portfolios (expected number)
• 8.Expected return
• 9.Description of the investment strategy

In the process of our working relationship, we would require more information, in order to produce a more detailed agreement:

• 1.Description of the company’s activities:
  • detailed structure of assets
  • sources of funding
  • types of income
• 2.beneficial owners of the fund:
  • place of residence
  • sources of funds
  • shares
• 3.The desired ownership/management structure:
  • type of shares (voting / non-voting)
  • investors rights (whether they will have the opportunity to manage the fund)
  • managing directors of the fund — professional experience (scope, length of service)

Based on our initial contact with the client, our experts create and individual action plan. Once it is created and approved by the client, we can begin its realisation. The hourly rate of our expert is 10,000 rubles.

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