Investing through LCC

Discussion in 'Professional Trading' started by ledd, Oct 14, 2005.

  1. ledd


    OK, here's the problem.

    Let's say I have a LCC company in a foreign country, founded for the purpose of buying stocks.

    What I now want, is that my company is open for investors that would buy stocks on that market through my LCC trade company, or investors that would invest in my company which would buy stocks with their money and gave the earnings (withhout fees or whatever) back to investors
    Let's also say that an external hedge fund also wants to invest.

    How do I do that legally, how can third party investors (small investors per example) invest money in my LCC that would buy stocks on that market?

    How can that be done the cheapest and simplest way possible?

    LCC is a must.

    I would appreciate any help.
  2. Why is this a foreign entity? Is it foreign to both yourself as the founder and also to the investors as well? It might be helpful to know what countries you are resident in and citizen of, ditto for the investors, and finally what country the entity is to be established in and from what countries it will operate, and where it will invest.

    Also it might be helpful to know how this entity is expected to exist when all gross earnings are distributed to the investors, leaving nothing to operate the entity or compensate the founder. You're just a magnanimous guy, I suppose?
  3. ledd


    Yes, its a foreign country to me also.
    My partner is from the US and I am from Europe, and the company would invest in a middle eastern country.
    The company can exist, that is not the issue. We can buy stocks with it, thats also not an issue.

    The issue is, how to open it to third-party investors.:confused:
  4. That would probably depend more on the regulations at the country where the company is going to operate. espeially the regulations regarding who can manage third party funds, and such. You probably need to be recognized by the country as a finantial entity, and b regulated under the rules of the local market.
    You're basically operating under the model of a local investment fund. That fund's activities are operation on the north america stock market, the funds means for accesing the markets are through an LCC.
    im making a lot of assumtions as I dont know what country we're spakin of, neither do I know what kind of regulations are in place for that country. But something around those lines might be feasible.
    Another feasible way is to create an anonimous society, which belongs to the investors, in amounts proportional to their investments. [aka shares] and that firm owns the LCC.
    What's important i think, is that to the eyes of the Market you're using a regular LCC that happens to be owned by an offshore firm.
  5. Who makes investment decisions? You? That would make you a money manager as well... So, that on top of your "investment LLC" issues that you have to worry about...
    Since you mentioned that you live in Europe, keep in mind that a money manager profession is a very highly regulated activity in the EU... This is regardless where your investment vehicle is registered and/or located...
  6. Did you mean to write LLC?

    In Europe, you can't make it available to 3rd party investors unless you're registered (and regulated) as a financial services company. It's expressly forbidden to do otherwise (ie. create a fund open to investors), even in the most flexible EU jurisdictions.

    Ofcourse, you could do it (ie. sell shares to others), but if something goes wrong (e.g. lose money and some disgruntled investor sues you) you'll have trouble.

    In the company's paperwork, what kind of activities do you list?