Hedge Funds

Mutual/hedge fund characteristics

Collective investment vehicle that pools money from investors and invests in a number of instruments including stocks, bonds, options, commodities, money market instruments and other investment securities.

The income earned through these investments and the capital appreciation realized by the fund, are shared by its investors in proportion to the number of units owned by them.

Provides an element of risk spreading through diversification.

Statute law and licensing authority

Seychelles’ statute law on mutual funds is contained in the Mutual Fund and Hedge Fund Act, 2008. The governing body for mutual funds in Seychelles is the, Financial Services Authority (FSA). The FSA is conferred powers of licensing and regulation of the mutual funds in Seychelles.

Mutual/hedge funds constitution

Mutual Funds may be lawfully constituted as a:

• cooperatives
• Limited partnership incorporated in Seychelles under the Limited Partnerships Act 2003 or a similar partnership incorporated in a recognized jurisdiction.
• trading companies
• A company governed by the International Business Companies Act 1994
• A company under the Companies Act, 1972 together with companies under the Companies Act, 2003 (Special Licence)
• mutual fund
• A mutual fund registered in Seychelles under the International Funds Act 1994, or a similar fund registered in a recognized jurisdiction.

The most common structure for a Seychelles Mutual Fund: International Business Company.

Types of mutual funds

The Seychelles Mutual Fund and Hedge Fund Act prescribes four different types of funds:

Private Fund

• No more than 50 investors
• Private business connection
• Aimed at the professional adviser looking to gather together a consortium of investors
• Prohibits any invitation to public to subscribe for shares
• No minimum or maximum investment required

Public Fund

• A Mutual Fund that is not a Private Mutual Fund or Professional Fund
• Designed to be mass marketed
• Applicant needs to furnish a detailed offering document
• The Authority demands that all risks and plans of the fund are disclosed upfront to the investors

Professional Fund

• Aimed for Professionals of High Net investors with the initial minimum investment per investor being 100,000 USD
• Recognized Banks, Mutual Funds, Insurance Companies and Securities dealers etc.

Exempt Foreign Fund

• Already licensed as a mutual fund in a recognized jurisdiction
• Is not required to hold Seychelles fund license
• Must be administered by a Seychelles licensed fund administrator
• Is either listed on a stock Exchange or provides for a minimum investment of not less than 100,000 USD

Umbrella funds

The Seychelles Mutual Fund Law is flexible enough to cater also for Umbrella funds. An umbrella fund:

• consists of multiple sub-funds within the overall fund structure/fund entity that in effect operates as individual investment fund
• enables funds with different strategies to be created within the same legal structure, reducing the funds’ costs.
• makes it less expensive and more convenient for investors to switch investments from one fund to another

Application for fund license

The Authority (FSA) may authorize a fund provided a complete application is received. The documents accompanying an application form for authorization usually include:

• a current or latest draft offering document in relation to the fund
• certified true copies of the constitutional documents
• personal questionnaire for each director, trustee or general partner (unless the equity interests in the applicant or its controlling shareholder or beneficial owner are listed on a stock exchange of a recognized jurisdiction)
• written consent of the proposed fund administrator stating his consent to act in the fund and acceptance of the name of the fund
• written consent of the proposed auditor, legal advisor and custodian, stating their consent to act as the respective functionary of the fund and the acceptance of the name of the fund
• three year financial forecast of cash flow statements

The Authority (FSA) is entitled to require any other supporting information. The application is subject to fee. Additional requirements as to public funds and tax exempt foreign funds include the following;

• Public Funds
• a licensed public fund must adopt an offering document
• must submit a draft of aforesaid document to the Authority for approval and registration prior to each new offering
• Exempt foreign funds
• are exempted from the licensing procedure
• shall apply for tax exemption as an Exempt Foreign Fund by submitting the following documents to the Authority:
• fully and properly completed approval application form
• certified true copies of the license or other authorization granted by a regulatory body in a recognized jurisdiction
• proof that the fund is to be administered by a fund administrator licensed in Seychelles.
• the current or latest draft offering document.
• the exemption application fee

What do we offer for mutual funds?

Start-up

• providing comprehensive advice on the application process and legal requirements
• Drafting of offering document / Fund Prospectus
• Introduction to auditors, Bankers, Legal & Investment Advisors and other functionaries
• Drafting agreements between the Fund manager and the other fund functionaries / Pls

Set-up

• incorporating the Fund entity (A Company, Partnership or a Trust)
• Compliance and Regulatory services
• provision of registered agent and registered office services for the fund entity
• compiling and submitting the Fund license application to the authority for approval
• attending to the annual renewal of licenses

Administration

• full reporting and accounting services
• maintenance of books and records namely, share registers, register of directors etc.
• Net Asset Value calculations

Investment research

• Investment Research to support portfolio selection decisions

Our core services

• structuring, formation and administration of offshore corporate structures
• Trust Services
• additional Corporate Services – Offshore Bank Account Establishment and Management, Tax planning and evidence etc.
• private Client Trusts and fiduciary services
• accounting services
• preparation of offering documents and marketing materials
• selected Industry Research
• Fund Set-up – One off first year fees

Fund – Annual Renewal Fees

 Fund Entity Set up : IBC Formation – First year Fees

Fund Entity: IBC: Annual Renewal Fees

Fund Administration Fees:

Other Services

We will be happy to help you set up your Mutual Fund. Please do not hesitate to contact us.