Quote from Terminus:
I am looking to able to take outside capital from accrediated investors.
I want it to me offshore I guess?
You will first have to determine where you want to incorporate your hedge fund. If you will only be taking capital from non-USA investors then you are better off incorporating in the Cayman Islands or one of the other Caribbean islands, however if you want investors from the US, then it would be a good idea to incorporate in the US (many US funds are incorporated in Delaware State). Keep in mind that if you are accepting US investors you will have to comply with US tax laws and therefore it would be a good idea to get an accounting firm to do your taxes.
Once you have determined where you want to station your fund then your next step is to get a Hedge Fund lawyer familiar with the laws of that nation/island. The lawyer should be able to do the incorporation paper work, offering memorandum/prospectus, and register your fund with the local financial authority.
If you plan to have both US and non-US investors you will most likely want to setup a master-feeder structured fund.
This usually consists of 4 different entities.
1. The management company - (usually incorporated in the US, consists of the portfolio managers/traders - you)
2. The Master fund - The level at which fees are collected and performance track record is computed.
3. (Onshore feeder fund) - Incorporated in the US for US investors
4. (Offshore feeder fund) - Incorporated outside of the US only for foreign investors.
Cheers,
-Neo
