Hedge funds are used by foreign investors in Hong Kong who want to have a flexible investment capital but at the same time be able to buy and sell a number of assets. Hedge funds in Hong Kong are regulated by the Securities and Futures Commission (SFC) and they are defined as an alternative or non-traditional funds. Because these investment vehicles can have varying structures, the Commission approaches each investment scheme according to its characteristics.
Hong Kong is one of Asia’s leading fund management locations and its low taxation regime contributes to the city’s overall attractiveness as an investment and financial center.
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Hedge fund characteristics in Hong Kong
Hong Kong has an attractive and tax-efficient regulatory regime for hedge fund location and hedge fund managers. The hedge fund can be set-up as a simple fund incorporated as a limited partnership that is available to investors around the world.
Master-feeder funds and parallel funds can be set-up and managed from Hong Kong. When the sub-manager of these types of funds is located in Hong Kong, it will need to obtain a license from the Securities and Futures Commission. The specialists at our Hong Kong law firm can give you more details about licensing in the city.
Hedge fund management in Hong Kong
A hedge fund manager in Hong Kong must comply with certain requirements set forth by the SFC. A professional fund management company that has the proper competence can manage the fund and provide adequate risk management plans to serve a hedge fund business. The fund management company in Hong Kong should have personnel that is well trained in investment and an investment adviser that specializes in hedge funds.
The managing company that serves a single hedge fund should manage at least 100 million US$ in assets and have at least two personnel members with at least five years experience in hedge fund strategies.
Single hedge funds must have a good risk management system in place and a good internal control system. Asset management in Hong Kong can be carried out by individuals or companies that are licensed by the Securities and Futures Commission.
For more details about investment options in Hong Kong please do not hesitate to contact the experts at our Hong Kong law firm.