Advantages of opening a hedge fund in Hong Kong in 2021

Opening a hedge fund in Hong Kong in 2021 is relevant for those who plan to do business in Asia. Several advantages of the territory can be highlighted - the possibility to optimize taxation and a positive reputation.

The concept of OFC funds

Hedge funds in Hong Kong in 2021 have become the most popular due to changes in the OFC regime. The OFC structure was originally created to boost the territory's rating as an asset management center. Investors from other countries are now showing interest in opening licensed structures.

OFC is an open investment fund - a legal entity. The fund can be public or private. Regardless of the type, the structure of the fund must comply with some general principles. These include:

• The availability of appropriate experience among employees;
• Assets are safe;
• Disclosure;
• Compliance with legal provisions;
• Fullfillment of the terms and conditions of the foundation documentation.

The structure of the open-end fund must include an investment manager. An open-end fund may have sub-funds. If you have any questions regarding the opening of a fund, please contact our specialists at IT-OFFSHORE.

Advantages of hedge funds

The main advantage of operating is that such funds have more flexibility than simple companies. It is possible to cancel shares in order to pay off fund liabilities.

You may also distribute assets outside the equity if solvency requirements are met. Investment managers are given the opportunity to create sub-funds with different strategies.

Nuances of opening

The name of the OFC must be unique. Assignment of the name and other adjustments in the name of the legal entity is reviewed and approved by the Hong Kong Commission.

Before registering the structure it is important to know the nuances of passing an audit, as this procedure is considered mandatory. An auditor is appointed for each fiscal year. To prepare the report, the auditor uses existing standards.