Why Start a Fund in Switzerland?
Updated on Friday 09th June 2017
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The Swiss financial market represents one of the most stable jurisdictions at a European level. Foreign businessmen who are currently searching for a suitable market for investment purposes may choose Switzerland due to its long tradition related to financial activities. At the same time, businessmen interested in hedge fund startup must know that they can set up their operations here, as Switzerland is very well represented in this sense.
Hedge fund tradition in Switzerland
Businessmen who are interested in how to set up a fund in Switzerland as a hedge fund must know that the legislation in this field was modified on 1st March 2015. The Collective Investment Scheme Act (CISA) introduced new regulations for hedge funds, in the sense that it now states that these types of investment vehicles are to be regulated by Swiss Financial Market Supervisory Authority (FINMA).
Switzerland is a country which is traditionally known for the domiciliation of alternative funds. In this sense, it is important to know that the category is mainly represented by hedge funds.
Taxation benefits for Swiss funds
Investors who want to know more on the procedure on how to open an investment fund in Switzerland should know that these legal structures are liable to taxation. However, the funds registered in Switzerland are taxed following different taxation schemes.
For example, several types of funds are not liable to paying the income tax. The regulation is applicable for the below mentioned structures, as long as they do not hold investments in the real estate sector:
• contractual fund;
• investment company with variable capital;
• limited partnership for collective investments.
The above mentioned funds are considered tax transparent legal entities, included in the category of collective investment vehicles.
The withholding taxes available for these funds can be reimbursed to their investors, as long as the recipients are tax residents of one of the countries with which Switzerland has concluded a double taxation treaty.
Please address to our team of affiliates in Switzerland for more details on the benefits of registering a fund in this jurisdiction.