Your Web Site Name

BVI Fund Types In the BVI regulated funds are categorized as either Incubator Funds, Approved Funds, Private Funds, Professional Funds, or Public Funds.  Another option also exists in the BVI as not all companies operating as pooled investment vehicles are subject to the Securities and Investment Business (Amendment) Act 2015 (amending the Securities and Investment Business Act 2010 (SIBA).  SIBA regulates only open-ended funds (i.e., those whose equity interests are redeemable at the option of the investor).  Consequently, closed-ended "funds" (i.e., whose equity interests are not redeemable at the option of the investor) are not subject to specific regulation in the BVI.  The redemption feature represents the key distinction between closed-ended companies operating as "funds", Incubator Funds, Approved Funds, Private Funds, Professional Fund and Public Funds.

Why a BVI Closed-Ended Company as a Fund? Not all companies operating as pooled investment vehicles are subject to the Securities and Investment Business (Amendment) Act 2015 (amending the Securities and Investment Business Act 2010 (SIBA).  The BVI investment fund industry is regulated by the Financial Services Commission (FSC).  SIBA and the FSC regulate only open-ended funds (i.e., those whose equity interests are redeemable at the option of the investor).  Consequently, closed-ended company "funds" (i.e., those whose equity interests are not redeemable at the option of the investor) are not subject to specific regulation in the BVI.  In the BVI, the redemption feature represents the key distinction between closed-ended companies operating as "funds" and the Incubator Funds, Approved Funds, Private Funds, Professional Fund and Public Funds.

BVI Closed Ended Company "Fund"  Do not let the words "closed-ended" confuse you. The BVI closed ended company "fund" can accept investor subscriptions on a continuous basis.  The BVI closed ended company "fund" is structured in the same manner as a regulated hedge fund but an investor does not have an absolute right to redeem shares on demand.  The M&A is drafted to limit the right of equity investors to redeem shares on demand.  Instead, the right to redeem is left to the sole discretion of the hedge fund's director.

Upgrading the Closed Ended Company "Fund" If and when the BVI closed ended company "fund" is allowed to convert to a BVI regulated hedge fund, its M&A is amended to include a right to redeem on demand for the shareholders. In the past, it was a simple matter to convert the BVI closed-ended company "fund" structure to a regulated fund. 

Recently, the BVI Financial Services Commission has moved the goal post on this issue and converting the BVI closed ended company "fund" company to an Incubator Fund, an Approved Fund, a Private Fund, or a Professional Fund may no longer be possible.  Contact Hedge Fund Attorney Hannah Terhune for Assistance

Naming the Closed Ended Company "Fund" The word "fund" cannot be used in the company name, as this is right is reserved for fully regulated funds in the BVI.  Click Here for the BVI List of Restricted Words that cannot be used to name a closed-ended company "fund".  Contact Us for Help Setting Up a BVI Hedge Fund

Offering Documents The BVI closed ended company "fund" can be launched with or without hedge fund offering documents.  When a BVI closed-ended company is used as a fund, it is very important that the restricted redemption rights of investors are fully disclosed in the fund's offering documents.  Learn More About Offering Documents 

Such restricted redemption rights may cause some prospective investors to be hesitant to invest in the fund.   However, when the closed ended "fund" is properly marketed by word of mouth to personal and business associates, friends and relatives, the restrictive redemption rights should not pose a problem.  Learn More About Hedge Fund Marketing

UBTI Blocker Fund Closed ended company "funds" are useful for U.S. fund promoters that need a "UBTI blocker" solution.  For example, U.S. based hedge fund managers expecting U.S. tax-exempt investors to invest in the fund (i.e., retirement accounts and pension funds) should set up an offshore hedge fund in the form of a UBTI blocker company when margin trading is required to execute the hedge fund's trading program.  The reason for this is the need for tax-exempt investors to avoid unrelated business taxable income (UBTI) tax exposure.  Learn More About U.S. Tax Issues

Under U.S. income tax laws, a tax-exempt investors (i.e., as IRA, 401(k) plan, etc.) investing in a financial product that involves borrowing money may be liable for tax on “unrelated business taxable income” (“UBTI”) notwithstanding its tax-exempt status.

Why the British Virgin Islands? The British Virgin Islands (BVI) is an attractive and affordable country for hedge funds.  The BVI is a zero tax country and has no capital gains or capital transfer taxes, no inheritance tax, and no sales tax or VAT.  BVI is committed to remaining fully compliant with international financial regulatory norms and regulations. There are no regulatory restrictions on investment policies or strategies and there is no requirement to appoint local directors, administrators or auditors.  It boasts a full range of professional service providers and very low start-up and ongoing fees and costs.The British Virgin Islands (BVI) is one of the best countries in the world to set up a hedge fund and a licensed investment management business.  Presently, it offers start up fund managers more fund options than any other country.  In the BVI regulated funds are categorized as either Incubator Funds, Approved Funds, Private Funds, Professional Funds, or Public Funds.  Another option also exists in the BVI--the Closed-Ended Company

"Offshore" USA Investment Adviser Registration Does your home country not offer licensed investment adviser status to anyone outside the establishment? Don't be discouraged! Click Here to read our landmark article about the advantages of registering as an investment adviser with the U.S. Securities and Exchange Commission (SEC) or with one of the fifty (50) states. U.S. law is clear, fair and easy to comply with.  Learn More About Investment Advisers  and Contact Hedge Fund Attorney Hannah Terhune for a Free Consultation

U.S. SEC Offshore Alert The U.S. SEC's 134-page report published in 2003--The Implications of the Growth of Hedge Funds--presents the status of the hedge fund industry as viewed in the United States.  What is interesting about this SEC Report is that articles and web content authored by our very own hedge fund attorney Hannah Terhune, JD, LLM (Taxation) (when she was the Chief and only Attorney at GreenCompany.com) on offshore hedge funds was cited on page 10 of the U.S. SEC Report as providing information the SEC Staff found to be valuable in its understanding of the hedge fund industry.  For a decade, hedge fund attorney Hannah Terhune has been counted on by the U.S. government and hedge fund organizers worldwide as a source of cutting edge and practical information on hedge fund formations.

You will see from this web site that we supply more information about hedge funds than most books do on the subject.  It's great to see that Hannah Terhune's expertise is appreciated by the SEC! This is quite a coup for Hannah, and provides one more piece of evidence as to how she can help you.  You can reach her today at hterhune@capitalmanagementservicesgroup.com or at +1 (307) 413-2212 or on Skype at:  CapitalManagementServicesGroup.

Call Us First  We are experts in international hedge funds and tax. Click on any reference below to our leading articles:

Strategic Hedge Fund Planning by Hannah Terhune.  Wilmott Magazine Ltd. (Volume 2013, Issue 63, pages 8-11 January 2013).

Hedge Funds - Limited Partners' Right of Access After Parkcentral Global, L.P., v. Brown Investment Management, L.P. by Jim Brennan.   Cititrust Edge Magazine (4th Quarter 2012).

Strategic Hedge Fund Planningby Hannah Terhune.  Canadian Hedgewatch (March 2012).

Strategic Hedge Fund Planning by Hannah Terhune.  MoneyScience (March 2012)

Hedge Funds - Limited Partners' Right of Access After Parkcentral Global, L.P., v. Brown Investment Management, L.P. by Jim Brennan.  Canadian Hedgewatch (July 2011).

Planning for Cross-Border Financing Arrangements.  Practical International Tax Strategies (May 31, 2011).

U.S.--Tax Traps of Non-U.S. Issuer Debt Offerings.  Practical International Tax Strategies (April 15, 2011).

America the Beautiful Tax Haven.  Cititrust Edge Magazine (1st Quarter 2011).

Offshore Hedge Fund Focus:  Master & Feeder.  Cititrust Edge Magazine (4th Quarter 2010).

U.S.--Cross Border Credit Agreements:  Planning for U.S. Withholding Taxes.  Practical International Tax Strategies (November 15, 2010).

Starting an Offshore Fund.  themanager.org (June 2008).

Mixing Investment Adviser and Brokerage Services.  Hedge Fund Monthly by EurekaHedge.com (October 2007).

Offshore Fund Taxation.  Hedge Fund Monthly by EurekaHedge.com (May 2007).

Forex Trader to Forex Manager.  Offshore Business Magazine (November 2006).

Forex Trader to Forex Fund Manager:  The Path to Success.  Hedge Fund Monthly by EurekaHedge.com (October 2006).

Drafting Hedge Fund Performance Allocations.  Hedge Fund Monthly by EurekaHedge.com (August 2006).

Como Crear su Propio Hedge Fund by Hannah M. Terhune, Eva Porras, Argilio Rodriguez and Garrett Fisher (2006).

Offshore Hedge Funds: Focus on Master/Feeders by Hannah M. Terhune (2006).

Temas Sobre Impuestos de Sociedades Colectivas para Hedge Funds en Paraiso Fiscal by Hannah M. Terhune (2006).

Establish a Marketable Track Record with an Incubator Fund by Hannah M. Terhune (2006).

Must I Register as a Commodity Pool Operator? by Hannah M. Terhune (2006).

Do’s and Don’ts for Crafting Hedge Fund Peformance Allocations by Roger D. Lorence and Hannah M. Terhune. Derivatives:
Financial Products Report (an RIA publication) (September 2005).

Trading Foreign Index Contracts? Know the Tax Rules Before You Trade by Hannah M. Terhune and Roger D. Lorence. Stocks, Futures and Options (June 2005).

Practical Strategies For Section 475(f) Elections by Roger D. Lorence and Hannah M. Terhune. Derivatives Financial Products Report (WG&L/RIA,a Thompson Company) (March 2005).

Forex Hedge Fund Management by Hannah Terhune and Roger D. Lorence.  Currency Trader (March 2005).

Advising Clients on Internet Server Co-Location Agreements, Practical International Tax Strategies (March 15, 2004).

Structuring and Financing International Operations Using Hybrid Entities and Tax-Efficient Financing Practical U.S./International Tax Strategies (Jan. 15, 2004).

Hedge Fund Compensation Arrangements. Practical U.S./Domestic Tax Strategies at Page 18 (Dec. 2003).

U.S. Inbound Investment – The Portfolio Interest Exemption. Practical U.S./International Tax Strategies (Dec. 15, 2003).

Foreign Futures Planning: The 60/40 Question. Practical U.S./International Tax Strategies at Page 12 (Sept. 30, 2003).

Managing Offshore Hedge Funds - A View from the Beach: Practical U.S./International Tax Strategies at Page 9 (June 15, 2003).

Offshore Hedge Funds - Master/Feeder Compliance Issues: Practical U.S./International Tax Strategies at Page 9 (May 15, 2003).

Ready for Help? Please call us (307) 213-4732 or e-mail Hannah Terhune, international hedge fund and tax attorney.

Capital Management Services Group, Inc. is recognized by discriminating persons as being a foremost professional authority in the hedge fund industry.  Ms. Terhune's numerous articles on hedge funds and international tax matters have appeared in publications worldwide. Read Our Leading Media Content and Articles by Hannah Terhune on Hedge Funds and International Tax Planning, Chances are, if you have read anything related to starting a hedge fund, Ms. Terhune wrote it first. Read Our Client Comments and Read About Hannah Terhune on LinkedIn.  When you consult with us, you have access to a unique blend of securities, tax, and business experience.  Give us the opportunity to put our knowledge and experience to work for you. We provide high quality services at competitive rates.  Give us a call and let us prove what we can do for you.  You can get answers to your specific questions in a consultation. Schedule a Consultation  We are confident that when you are finished with your consultation you will be impressed and more informed about your business plans than before. The views expressed on this website are subject to change based upon new information, new technology, consideration of new perspectives and/or for no reason at all. This website exists for educational purposes and nothing on this website should be considered as legal advice.  Website content and design are copyrighted 2018© by Hannah M. Terhune and all rights are reserved.