| WealthCapfund offshore hedge fund services | | | | or for customers), whether or not a dealer in |
| division is solely dedicated to the requirements of | | | | stocks and securities board. This can be done |
| hedge funds, money managers and other types | | | | through a resident broker, custodian, commission |
| of funds. The condition of the equity market is | | | | agent or other independent agent provided that it |
| such that many investors look at hedge funds to | | | | does not maintain an office within the US through |
| better their returns. Hedge funds are one of the | | | | which or by the direction of which the |
| most complex and misunderstood investment | | | | transactions in securities, commodities or stocks |
| vehicles around. Depending upon the strategy of | | | | are effected. |
| the manager, hedge funds can be used either for | | | | Forming an Offshore fund |
| optimum safety or for out and out risk. The | | | | The correct structuring of an offshore hedge |
| safety approach doesn't aim to beat the markets | | | | fund is of critical importance and is a major |
| but to match them. | | | | determining factor in its overall success. There are |
| Taxation: | | | | 6 major issues to be addressed. |
| You can consider setting up an offshore fund if | | | | 1. Tax Issues |
| you manage money for either foreign and/or US | | | | 2. Regulatory Matters |
| tax exempt individuals and businesses. But don't | | | | 3. Day-to-Day business management |
| consider offshore funds if you go offshore to | | | | 4. Investment Strategies |
| avoid US taxation. | | | | 5. Marketing |
| The consequences of tax to an offshore hedge | | | | 6. Back Office Operations |
| fund are substantial. They generally engage in | | | | These areas are closely related and addressing |
| investment strategies in order to profit from | | | | them prior to creating offshore hedge fund |
| capital appreciation and daily swings in the price of | | | | eliminates problems later .The benefits of investing |
| securities, stocks or commodities. These gains are | | | | in a fund of hedge funds is improved risk |
| generally characterized as gains from the sale of | | | | adjusted investment returns in the form of |
| capital assets. | | | | 1. Acceptable levels of volatility |
| Offshore hedge funds are not taxed on | | | | 2.Capital preservation |
| 1. Interest from US bank deposits or interest | | | | 3. Portfolio diversification |
| entitled to the portfolio interest exception | | | | 4. Investing in a pool of top international |
| 2. Capital gains so long as the gains do not arise | | | | investment managers through a single fund. |
| from the sale or exchange of a direct or indirect | | | | As an added advantage, the timing of entry and |
| interest in real property located in the US. | | | | exit is significantly diminished, as the volatility of |
| Dealer Safe Harbor | | | | many hedge funds is much lower than equivalent |
| An offshore hedge fund may trade in US stocks, | | | | traditional investment products. |
| securities and commodities (for its own account | | | | |