Question Offshore Invest Structure

[Sir Gelato]

Hi everybody, here's the deal.
I'm looking if it would be possible to create an offshore or onshore company that can allow me to manage client funds without having any licenses (like forex, investment vehicles, etc etc.)

The structure is very simple if It's possible, a customer, business or personal; transfers funds and my company, with a previous agreement signed from the client, manages the funds.

¿Could be the setup possible? I've been thinking on some kind of escrow or trust setup.

Thanks a lot in advance, glad to have a community to share doubts...

Take care...

 

[khinkali]

You are allowed to do that activity as long as it is family and friends.

OK so Seychelles allows you to set up a collective investment scheme for family and friends? That sounds good.

But what about the location of those friends? I don't think a Seychelles company can protect you from UK, US, EU, AU etc. collective investment regulations. I see that "immediate family" are listed in COBS 4.12 for UK unregulated schemes, and that there are provisions for high net worth or sophisticated investors, but I don't think there's an exemption for friends.

 

[CaptK]

If it's between friends and family then you could set up fund or even just a company between you and the select few.

As you start to generate profit then invest in a proper structure which could range from 20K-50K. This will then allow you to take money from investors. Different jurisdictions will have different rules. Look at Mauritius, Seychelles, UAE, Vanuatu, Cayman or BVI.

 

[khinkali]

If it's between friends and family then you could set up fund or even just a company between you and the select few.

What about regulation where the investor friends are located?

 

[AMD]

Did you speak with an consultant in the Seychelles about the CSL https://www.offshorecorptalk.com/threads/the-seychelles-csl-company.18673/

It's worth to have a speak with one there. You are mentor group so check https://www.offshorecorptalk.com/resources/ there are a few giants in the Seychelles that could setup this for you with ease.

 

[exprtadvisrdev]

Actually, this is exactly what I'm looking for too...

I have a good investment strategy that has 50-80% annual growth with 8 years of track history.
I'm investing in USA IPO's through European broker, and now I have some friends and family who want to basically invest money into the ''pool''
People are from EU and USA

Now I don't know how to legally do that, any advice? I am in the process of opening an offshore company for that.

Now my question is, how to legally collect money from people and invest it as a company?
I was thinking to make every investor a shareholder, ie. if they invest 10k i will give them 100 shares of the company.
Or maybe raise money through crowdfunding? Will that work?

Maybe invoicing consulting or similar digital product /services and then that money invest in the stock market and internally have contract and agreement (how legal is that lol)

I would really appreciate if anyone has some constructive ideas!

Thank you!

it doesn't matter where you incorporate your company, if there is money from a US citizen then you need to follow US rules. Cayman island private equity fund is one of the easiest to incorporate but like I said before: You will need to follow US rules

 

[CaptK]

What about regulation where the investor friends are located?

Only US clients are a problem

 

[topleaders]

I only see a workaround for USA citizens, if a US person opens a legal entity offshore. it cost $1000 roughly to get a Belize or 1500 to get a BVI company all-inclusive, and then the members are not individuals but the company incorporated in an offshore jurisdiction, under the law of that jurisdiction.
Any other ideas?

 

[topleaders]

Only US clients are a problem

Why other nationalities are not the problem?

 

[exprtadvisrdev]

I only see a workaround for USA citizens, if a US person opens a legal entity offshore. it cost $1000 roughly to get a Belize or 1500 to get a BVI company all-inclusive, and then the members are not individuals but the company incorporated in an offshore jurisdiction, under the law of that jurisdiction.
Any other ideas?

I think that actually just increase the complexity without reasons because now they will need to create a private fund company just for them (and follow US rules) and them that company is the one that is investing in yours... But I could be wrong, let's see is someone with more experience knows about it.

Why other nationalities are not the problem?

Others are too (especially EU), I guess he means that the US is the one that is most difficult to work with.

 

[CaptK]

Why other nationalities are not the problem?

Other nationalities are ok because the banks will accept the funds no problem. US clients you have to report to uncle Sam, the bank's don't want the headache.

 

[topleaders]

I think that actually just increase the complexity without reasons because now they will need to create a private fund company just for them (and follow US rules) and them that company is the one that is investing in yours... But I could be wrong, let's see is someone with more experience knows about it.


Others are too (especially EU), I guess he means that the US is the one that is most difficult to work with.

I think is doable if I have a fund in BVI and they form a company in BVI and that company is joining my fund...
There are no US regulations involved because I am an LP with a BVI entity, not an individual.
But that is not the most cost-efficient solution, because there are costs of forming a fund and forming a company for each investor...

 

[khinkali]

Other nationalities are ok because the banks will accept the funds no problem.

Once you set up a company in some jurisdiction that doesn't require any regulation for your fund, and your bank is willing to accept funds from your investor friends, what about regulations where those friends live? I don't think "my fund is in country X which has no regulations" gets you out of deep waters with regulators if your investors are in UK, EU, AU, etc.

I think is doable if I have a fund in BVI and they form a company in BVI and that company is joining my fund...

If each of your fund members is a company owned by one of your investors, then you don't need to worry about collective investment regulation in the UBO jurisdictions? That sounds interesting.

 

[CaptK]

Once you set up a company in some jurisdiction that doesn't require any regulation for your fund, and your bank is willing to accept funds from your investor friends, what about regulations where those friends live? I don't think "my fund is in country X which has no regulations" gets you out of deep waters with regulators if your investors are in UK, EU, AU, etc.

If each of your fund members is a company owned by one of your investors, then you don't need to worry about collective investment regulation in the UBO jurisdictions? That sounds interesting.

This is a private arrangement with my own money. My country of residence can not tell me what to do with my money. I could invest in an opium field in Afghanistan if I wanted.

It's cross border jurisdiction and the only country that can do anything is the country of incorporation and the bank.
If you take US residents funds by law the bank has to keep records and inform IRS.

Alternatively call it a syndicate lol.

 

[boomy]

You ask for troubles as soon as you take on US citizens into your business. It has bee seen on all cases where banks, small and large, ignored the fact they have to report by FATCA.

 

[topleaders]

You ask for troubles as soon as you take on US citizens into your business. It has bee seen on all cases where banks, small and large, ignored the fact they have to report by FATCA.

But the company from BVI or Belize is not a US citizen and I am not sure if there is any difference if it's own by Russia ln, EU, or US citizen. Ltd is entity by itself

 

[khinkali]

It's cross border jurisdiction and the only country that can do anything is the country of incorporation and the bank.

I think we just disagree on this.

EU has AIFMD and UK has lots of FCA issues if you sell to local customers, wherever you and your fund are based. These might not apply due to immediate family, sophisticated investors, high net worth investors, employees of the fund or 'reverse solicitation' exemption. You can be committing an offense if you sell collective investments to friends in for example the UK.

I do agree that USA is probably the most difficult jurisdiction to sell to, and the most likely to take meaningful action.

 

[CaptK]

I think we just disagree on this.

EU has AIFMD and UK has lots of FCA issues if you sell to local customers, wherever you and your fund are based. These might not apply due to immediate family, sophisticated investors, high net worth investors, employees of the fund or 'reverse solicitation' exemption. You can be committing an offense if you sell collective investments to friends in for example the UK.

I do agree that USA is probably the most difficult jurisdiction to sell to, and the most likely to take meaningful action.

He is fine, he cant advertise and solicit for business. If someone is interested they can contact him for information. You are right he can not solicit nor can he have retail clients, they all have to sophisticated investors by virtue of having 100K in the bank and assets worth over 1M.

There are lot of accountants who use this loophole in the UK.

 

[topleaders]

He is fine, he cant advertise and solicit for business. If someone is interested they can contact him for information. You are right he can not solicit nor can he have retail clients, they all have to sophisticated investors by virtue of having 100K in the bank and assets worth over 1M.

There are lot of accountants who use this loophole in the UK.

Let's take for example a forex broker, all of them are accepting worldwide citizens except US. Any retail person can open a brokerage account without having 100k or 1mill of net worth. Heck you can open one with 0 funds. I doubt they have regulator license from all 150 world countries

 

[CaptK]

Let's take for example a forex broker, all of them are accepting worldwide citizens except US. Any retail person can open a brokerage account without having 100k or 1mill of net worth. Heck you can open one with 0 funds. I doubt they have regulator license from all 150 world countries

Exactly my point, a lot of the Forex are based in Mauritius or Seychelles because they are regulated there. It's a lot cheaper and less headache. I have a managed fund in Mauritius closed end which I have friends and family in. I'm going through the process of registering in the UAE as I can access Middle East clients as they are comfortable with the jurisdiction. It's not cheap but I have passed that cost on to them and they are happy because it's a jurisdiction they trust.

 

[cyprusbanker]

Very risky strategy. It is better to do it legal with license. Poland have great EMI license and also in Poland from 2021 there will be 0% corporate tax.

what is a great EMI license in Poland?