Setting up an Investment Fund

Discussion in 'Forex' started by perfectagent008, Mar 19, 2012.

  1. Hi everyone, I am looking to start an investment fund with my business partner. I am based out of the US and he is in the UK, we will trade only forex.

    I know in the US if there are less than 15 investors then I will be fine with no license because it is considered friends and family.

    Some people will invest from the UK and others from the US. I was thinking if I open a money manager account with a broker, then investors could open an account under their name, make a deposit and I can trade everything with a master account. However, this may be tough with investors from different countries (UK brokers don't accept US clients and so fourth).

    Would it be best to establish a limited liability partnership in a country that is a tax haven like BVI, Cayman Islands, etc. Then have investors send money to the LLP and then the LLP can trade the money from one account?

    Thanks for all the input.
  2. *(UK brokers don't accept US clients and so forth)
  3. rmorse

    rmorse Sponsor

    I can't advise you on the rules of when you need to be registered. I do think your correct if you're not marketing for investors and it remains friends and family.

    You can do all of the above. You can set up individual accounts for each investor and have trading rights through one platform issued by them. This would be SMA. You can create an entity, either an LLC or LP and have investors, and trade in one account. I would go the route of the LLC. Each person is a partner based on your agreement, and the LLC issues you trading rights. If you do this in the US, you need a valid US address. Investors can be from any country except those on a US Gov't watch lists.

    I've had my clients use in the past and they have been happy with their services.

  4. Thanks for the advice.

    I think I am avoiding starting an LLC or LLP in the US because of the high tax rate. I believe the corp tax rate is about 35%.

    Establishing something in Bermuda, British Virgin Islands, Cayman Islands, Panama, Bahamas, etc. would allow the fund to take advantage of the 0% tax rate.

    However, I don't know the first thing about setting up a business in any of those countries.

    Any idea which country would be the easiest to set up an off shore fund? In terms of registering the business, least amount of licenses or no licenses for fund management, opening a corp bank account and so on.
  5. rmorse

    rmorse Sponsor

    LLC in the USA are taxed like a partnership. You distribute earnings to the partners, then they pay the tax. Off shore tax "stuff", I can't help with.
  6. What about setting up somewhere like Nevada, USA. I was reading that there is no personal or corporate income or capital gains tax in Nevada.

    Anyone familiar with forex + Nevada?