Starting a Hedge Fund in the Bahamas
Updated on Wednesday 22nd November 2017
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The Bahamas represents one of the leading investment markets at a global level for setting up a hedge fund startup. The legislative framework under which the Bahamas investment funds operate is the Investment Funds Act 2003, which prescribes four classes of vehicles. The Act offers the possibility of setting up the SMART fund, a type of vehicle designed for hedge fund activities.
SMART funds in the Bahamas
The SMART funds were created by the local authorities in order to simply the registration procedure, which usually requires a large set of documents that have to be submitted with the relevant institutions. The main characteristics of the SMART funds in the Bahamas is represented by the fact that they benefit from a straightforward registration and a reduced number of registration documents.
Foreign businessmen interested in the procedure on how to start a hedge fund in the Bahamas may choose from several types of SMART funds models, designed for specific categories of businessmen and investment activities.
The SMART funds can receive a rapid authorization on the local market, by licensing the Unrestricted Fund Administrators operating in this jurisdiction.
Types of SMART funds in the Bahamas
The legislation regulating the investment market in the Bahamas provides seven types of SMART funds, created to fit specific business scenarios that are met here. The requirements for the procedure on how to start a fund vary greatly depending on the model chosen by the investors. For example, a SMART vehicle operating as a hedge fund can have different requirements based on the number of investors (the funds can be set up with maximum 5, 10 or 15 investors or more).
One of the models for SMART funds can be set up with maximum 5 investors and it may operate as a private investment company. In another case, the SMART fund can be set up by up to 50 investors who should comply with the requirments for “super-qualified investors”, one of the criteria being to invest a minimum of $ 500,000 in the fund (the minimum value subscribed by each investor).
Foreign businessmen can address to our team of affiliates in the Bahamas for more details related to the registration of a hedge fund.