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Hedge Funds in Singapore

Hedge Funds in Singapore

Updated on Thursday 15th September 2016

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Hedge-funds-in-SingaporeThroughout the years Singapore has become an important financial center in the Asia and it boasts a flourishing investment funds industry. Hedge funds are among the most popular types of investment funds in Singapore. The main law governing investment funds in the city-state is the Securities and Futures Regulations. However, there are also laws providing for the investment funds sector in Singapore. Among these are the Financial Advisers Act, the Financial Advisers Regulations and the Code of Collective Investment Schemes. Also, the Singapore Commercial Law provides for the types of structures one can employ in order to set up a hedge fund.

The video below shows foreign investors the main steps to set up a hedge fund in Singapore:

Types of hedge funds in Singapore

There are several types of investment funds one can open in Singapore and hedge funds can take two of those forms. These are:

  • -          open-ended retail funds;
  • -          closed-ended retail funds.

Singapore hedge funds can also be established as collective investment schemes, as long as they respect the regulations applied to open-ended retail funds. Hedge funds in Singapore, no matter their form, can be incorporated as limited partnerships and corporations. Also, any investment fund in the city-state is subject to the licensing criteria of the Monetary Authority of Singapore (MAS) which is also in charge with supervising fund managers’ activities.

How to set up a hedge fund in Singapore

The first step to open a hedge fund in Singapore is to choose the legal entity to be registered with the Trade Register. Once the company is incorporated, it must submit a prospectus with the MAS in order to obtain its license. Another important aspect to take into account is that a hedge fund must be marketed by a licensed fund manager who must meet the ‘fit and proper’ requirements imposed by the MAS and who must conduct their activities from an office located in the city-state.

Singapore hedge funds can be set up by:

  • -          retail investors;
  • -          institutional investors;
  • -          accredited investors.

Foreign hedge funds can also operate in Singapore, as long as they meet the MAS criteria. The main advantage of Singapore hedge funds is that from a taxation point of view, the entity is exempt from taxation.

For assistance in setting up a hedge fund in the city-state, do not hesitate to contact our law firm in Singapore.

 

 

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