604:), and non-public funds. Non-public funds are usually either categorised as private funds or professional funds or some equivalent label. Typically, investors in non-public funds can be assumed to be sophisticated because of the nature of the offering – there may, for example, be a high minimum initial investment, say US$ 100,000, and/or a requirement that investors establish that they are "professional investors" (although some offshore jurisdictions allow investors to self-certify this). Alternatively the fund may be designed for a small and select group of investors and the constitutional documents will limit the number of investors, say to no more than 50. Although most offshore jurisdictions permit funds to obtain licences to operate as public funds, the onerous regulatory requirements associated with such licences usually means that only a small minority of offshore funds are available for subscription by the general public.
638:
from taxes which may arise as a result of its investment activities in other countries. So, for example, if a fund formed in the Cayman
Islands realises a capital gain on trade in New York, it will still normally be liable for U.S. capital gains tax in the usual way. Similarly, if a person domiciled in the United Kingdom invests in a Guernsey fund, they will still be liable to taxation of income and capital gains received under British tax laws (subject to the rules on remittance of foreign earned income), notwithstanding the absence of any taxation imposed in Guernsey.
17:
1355:
1363:
158:(AUM). However, different sources may vary in relation to market share according to (i) which jurisdictions are considered to be "offshore" and which types of collective investment schemes are included. In relation to hedge funds (the archetypal offshore fund product) Cayman has a dominant market share.
145:
Most jurisdictions also require that offshore funds submit audited accounts to the regulatory annually. Almost all jurisdictions require directors of offshore funds to satisfy regulatory criteria in relation to fit and proper persons, but some jurisdictions also require directors to be separately
88:
Although the term is often used as a simply descriptive one, many onshore countries have specific definitions in their legislation or their tax codes for when an investment is treated as an offshore fund. For example, in the United
Kingdom see the Offshore Funds (Tax) Regulations 2009, and in the
637:
Typically the offshore jurisdiction in which a fund is incorporated will not impose any direct taxation on the income of the fund. Nor will it impose any withholding or similar income taxes on distributions by the fund to its investors. However, this does not normally operate to exempt the fund
646:
Different onshore countries treat income arising from offshore funds in different ways. US citizens are generally subject to taxation on foreign earned investment income regardless of where they live in the world and where the income is remitted to. Under
British tax rules, the taxability of
141:
In certain cases exemptions will be available. For example, feeder funds in a master-feeder structure are often exempted from the requirement to appoint a custodian, and the requirement to maintain a custodian may be waived where the prime broker also fulfils the role of custodian.
650:
There is a public perception that offshore investment funds are responsible for tax leakage in relation to cross border investment, and various laws have been passed by various countries shaped by that belief. Probably the best example of that is the
American
85:(where the investor cannot redeem out), and funds where the investment is structured by way of debt, are not normally subject to the usual regulatory requirements for investments funds, and so are not treated as funds in the stricter sense of that word.
607:
Most offshore domiciling of funds tends to be regulatory driven rather than tax driven. The relative absence of regulation relating to leveraging and investment strategies in offshore jurisdictions encourages higher risk funds, such as
599:
Typically, the regulatory regime will take a two tier approach, making a distinction between funds which are offered generally to members of the public (which will require a high degree of regulation because of the nature of potential
918:
See for example, in the Cayman
Islands, see the Mutual Funds Law, and in the British Virgin Islands, see the Securities and Investment Business Act 2010, each of which applies a three-tier regulatory approach in this
108:
In addition to the fund itself, most offshore funds are required by local regulations to have various functionaries most of whom are also required to be licensed under applicable legislation. These include:
1342:
77:
Similarly, although the reference to fund can be taken to include any sort of collective investment, within offshore jurisdictions themselves, the term offshore fund is often limited to purely
620:
Increasingly, economically developed countries are imposing direct regulation on offshore funds who wish to market to investors in those countries. The most recent example of this is the
659:
to the
British Overseas Territories (including popular offshore fund domiciles like the Cayman Islands and the British Virgin Islands). The most recent (and ongoing) example is the
372:
Figures for private equity funds, an investment product with similar liquidity constraints, are markedly different, with
Delaware enjoying over half the market on either measure.
81:(i.e. a fund where the investor can redeem his investment during the life of the fund) where the investment is by way of equity (rather than by debt). This is often because
660:
886:
853:
21:
70:. In the widest sense, offshore is sometimes used to include any type of cross border collective investment scheme, and popular fund domiciles such as
930:
105:
in the relevant jurisdiction, and investments will characteristically be by way of equitable interest (i.e. shares, partnership interests or units).
624:(AIFMD) which requires funds to comply with extensive rules and regulations in order to be able to market to investors within the European Union.
1089:
982:
621:
751:
For example, in the Cayman
Islands, see the Mutual Funds Law (2013 Revision), section 2 (definitions of "equity interest" and "mutual fund").
1049:
62:. However, the term is also frequently used to include other corporate domiciles popular for cross border investment structuring, such as
1358:
596:
Most developed offshore jurisdictions provide a broadly similar regulatory regime in relation to funds formed in their country.
647:
foreign earned income depends upon the domicile of the tax payer and whether the funds are remitted to the United
Kingdom.
975:
47:", the term is more descriptive than definitive, and both the words 'offshore' and 'fund' may be construed differently.
652:
893:
860:
828:
783:
1366:
1186:
1116:
968:
656:
50:
The reference to offshore, in the classic case, usually means a traditional offshore jurisdiction such as the
1074:
937:
1332:
1095:
700:
33:
1267:
74:
may be included within the definition of offshore, notwithstanding their substantial size as a country.
1106:
1390:
1385:
1054:
1023:
705:
40:
806:
See for example
Securities and Investment Business Act 2010, section 61(1) (British Virgin Islands).
1262:
1176:
1395:
1337:
1322:
1296:
1291:
1141:
1069:
1011:
155:
1317:
1231:
539:
531:
235:
227:
59:
1131:
991:
761:
730:
1121:
1017:
8:
1084:
676:
114:
1286:
1196:
1161:
820:
1157:
824:
684:
16:
1205:
1171:
1039:
688:
120:
98:
44:
1246:
1236:
1226:
1221:
1201:
999:
154:
Market share in offshore funds is normally measured either by number of funds or
132:
82:
1280:
1191:
1181:
449:
423:
199:
191:
126:
51:
36:
1379:
1276:
1241:
1126:
1101:
1029:
710:
78:
1327:
1272:
1079:
663:
which almost every major offshore fund domicile has agreed to be bound by.
24:
has responsibility for oversight of investment funds in that jurisdiction.
1301:
1059:
680:
557:
549:
353:
343:
960:
1166:
1136:
1044:
1034:
609:
485:
459:
307:
299:
102:
67:
601:
101:, partnership - typically a limited partnership - or (less commonly)
655:(FATCA). But earlier examples also included the application of the
89:
United States see section 871 of the Internal Revenue Code of 1986.
441:
431:
413:
405:
335:
325:
217:
209:
63:
521:
513:
503:
495:
289:
271:
263:
245:
71:
477:
467:
317:
253:
55:
1111:
843:
Cayman Islands Director Registration and Licensing Law (2014)
672:
661:
Convention on Mutual Administrative Assistance in Tax Matters
575:
567:
361:
281:
784:"US Regulatory and Tax Considerations for Offshore Funds"
137:(in certain jurisdictions) an authorised representative
675:(an NGO), alleged that they are a main player of the
385:
382:
171:
168:
22:
British Virgin Islands Financial Services Commission
1377:
1090:Qualifying investor alternative investment fund
622:Alternative Investment Fund Managers Directive
976:
612:, to form themselves in those jurisdictions.
1050:Labour-sponsored venture capital corporation
377:Offshore private equity funds - market share
149:
97:Most offshore funds are formed as either an
887:"Domiciles of Alternative Investment Funds"
854:"Domiciles of Alternative Investment Funds"
1362:
983:
969:
928:
990:
892:. Oliver Wyman. p. 4. Archived from
859:. Oliver Wyman. p. 3. Archived from
396:
390:
182:
176:
15:
762:"Offshore Funds (Tax) Regulations 2009"
399:
393:
185:
179:
1378:
936:. Tax Adviser Magazine. Archived from
964:
817:British Virgin Islands Commercial Law
683:, in particular through the usage of
731:"Offshore Mutual Fund - definition"
163:Offshore hedge funds - market share
13:
653:Foreign Account Tax Compliance Act
14:
1407:
1361:
1354:
1353:
922:
912:
1187:Socially responsible investing
1117:Split capital investment trust
879:
846:
837:
809:
800:
776:
754:
745:
723:
657:European Union withholding tax
92:
1:
1075:Open-ended investment company
929:Ray Magill (September 2011).
716:
701:Collective investment schemes
632:
586:
83:closed-ended investment funds
1333:Returns-based style analysis
1096:Real estate investment trust
931:"Taxation of offshore funds"
666:
641:
579:
571:
561:
553:
543:
535:
525:
517:
507:
499:
489:
481:
471:
463:
453:
445:
435:
427:
417:
409:
365:
357:
347:
339:
329:
321:
311:
303:
293:
285:
275:
267:
257:
249:
239:
231:
221:
213:
203:
195:
34:collective investment scheme
7:
1268:Efficient-market hypothesis
694:
627:
591:
79:open-ended investment funds
10:
1412:
1107:Short-term investment fund
706:Offshore Financial Centres
615:
1351:
1310:
1255:
1214:
1150:
1055:Listed investment company
1024:Fonds commun de placement
998:
150:Global market/world share
1263:Arbitrage pricing theory
909:. Figures are for 2010.
876:. Figures are for 2010.
1338:Traditional investments
1323:Commodity pool operator
1297:Noisy market hypothesis
1292:Modern portfolio theory
1142:Unitised insurance fund
1070:Open-ended fund company
1012:Common contractual fund
156:assets under management
1318:Alternative investment
1232:Institutional investor
540:British Virgin Islands
532:British Virgin Islands
236:British Virgin Islands
228:British Virgin Islands
60:British Virgin Islands
25:
1132:Unit investment trust
992:Investment management
679:, allowing legalized
41:offshore jurisdiction
19:
1122:Tax transparent fund
1018:Exchange-traded fund
823:. 2012. para 6.077.
1177:Manager of managers
1085:Private-equity fund
821:Sweet & Maxwell
677:underground economy
379:
165:
1287:Martingale pricing
1197:Thematic investing
1162:passive management
685:shell corporations
375:
161:
43:. Like the term "
26:
1373:
1372:
1151:Investment styles
671:Critics, such as
584:
583:
370:
369:
1403:
1391:Offshore finance
1386:Investment funds
1365:
1364:
1357:
1356:
1206:growth investing
1172:Impact investing
1040:Investment trust
985:
978:
971:
962:
961:
952:
951:
949:
948:
942:
935:
926:
920:
916:
910:
908:
906:
904:
898:
891:
883:
877:
875:
873:
871:
865:
858:
850:
844:
841:
835:
834:
819:(2nd ed.).
813:
807:
804:
798:
797:
795:
793:
788:
780:
774:
773:
771:
769:
758:
752:
749:
743:
742:
740:
738:
727:
689:transfer pricing
380:
374:
166:
160:
99:offshore company
45:offshore company
1411:
1410:
1406:
1405:
1404:
1402:
1401:
1400:
1376:
1375:
1374:
1369:
1347:
1306:
1251:
1247:Performance fee
1237:Net asset value
1227:Fund governance
1222:Closed-end fund
1210:
1146:
1003:
1001:
994:
989:
958:
956:
955:
946:
944:
940:
933:
927:
923:
917:
913:
902:
900:
899:on 14 July 2014
896:
889:
885:
884:
880:
869:
867:
866:on 14 July 2014
863:
856:
852:
851:
847:
842:
838:
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791:
789:
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736:
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728:
724:
719:
697:
669:
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635:
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618:
594:
589:
152:
95:
32:is generally a
12:
11:
5:
1409:
1399:
1398:
1396:Legal entities
1393:
1388:
1371:
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1352:
1349:
1348:
1346:
1345:
1340:
1335:
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1314:
1312:
1311:Related topics
1308:
1307:
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1234:
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1212:
1211:
1209:
1208:
1199:
1194:
1192:Social trading
1189:
1184:
1182:Social finance
1179:
1174:
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1145:
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1114:
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1072:
1067:
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987:
980:
973:
965:
954:
953:
921:
911:
878:
845:
836:
829:
808:
799:
775:
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744:
733:. Investopedia
721:
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450:Cayman Islands
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429:
426:
424:Cayman Islands
420:
419:
416:
411:
408:
402:
401:
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395:
392:
388:
387:
384:
368:
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364:
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305:
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206:
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200:Cayman Islands
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192:Cayman Islands
188:
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181:
178:
174:
173:
170:
151:
148:
139:
138:
135:
129:
123:
117:
94:
91:
52:Cayman Islands
9:
6:
4:
3:
2:
1408:
1397:
1394:
1392:
1389:
1387:
1384:
1383:
1381:
1368:
1360:
1350:
1344:
1341:
1339:
1336:
1334:
1331:
1329:
1326:
1324:
1321:
1319:
1316:
1315:
1313:
1309:
1303:
1300:
1298:
1295:
1293:
1290:
1288:
1285:
1282:
1278:
1274:
1271:
1269:
1266:
1264:
1261:
1260:
1258:
1254:
1248:
1245:
1243:
1242:Open-end fund
1240:
1238:
1235:
1233:
1230:
1228:
1225:
1223:
1220:
1219:
1217:
1213:
1207:
1203:
1200:
1198:
1195:
1193:
1190:
1188:
1185:
1183:
1180:
1178:
1175:
1173:
1170:
1168:
1165:
1163:
1159:
1156:
1155:
1153:
1149:
1143:
1140:
1138:
1135:
1133:
1130:
1128:
1127:Umbrella fund
1125:
1123:
1120:
1118:
1115:
1113:
1110:
1108:
1105:
1103:
1102:Royalty trust
1100:
1097:
1094:
1091:
1088:
1086:
1083:
1081:
1078:
1076:
1073:
1071:
1068:
1066:
1065:Offshore fund
1063:
1061:
1058:
1056:
1053:
1051:
1048:
1046:
1043:
1041:
1038:
1036:
1033:
1031:
1030:Fund of funds
1028:
1025:
1022:
1019:
1016:
1013:
1010:
1009:
1007:
1005:
997:
993:
986:
981:
979:
974:
972:
967:
966:
963:
959:
943:on 2014-10-06
939:
932:
925:
915:
895:
888:
882:
862:
855:
849:
840:
832:
830:9789626614792
826:
822:
818:
812:
803:
785:
779:
763:
757:
748:
732:
726:
722:
712:
711:Offshore 2020
709:
707:
704:
702:
699:
698:
692:
690:
686:
682:
678:
674:
664:
662:
658:
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597:
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547:
541:
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397:Jurisdiction
391:Jurisdiction
389:
383:No. of Funds
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363:
360:
355:
352:
351:
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324:
319:
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265:
262:
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255:
252:
247:
244:
243:
237:
234:
229:
226:
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219:
216:
211:
208:
207:
201:
198:
193:
190:
189:
183:Jurisdiction
177:Jurisdiction
175:
169:No. of Funds
167:
164:
159:
157:
147:
143:
136:
134:
130:
128:
124:
122:
118:
116:
115:administrator
112:
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110:
106:
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100:
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84:
80:
75:
73:
69:
65:
61:
57:
53:
48:
46:
42:
38:
35:
31:
30:offshore fund
23:
18:
1328:Robo-advisor
1273:Fixed income
1204: /
1160: /
1080:Pension fund
1064:
957:
945:. Retrieved
938:the original
924:
914:
901:. Retrieved
894:the original
881:
868:. Retrieved
861:the original
848:
839:
816:
811:
802:
790:. Retrieved
778:
766:. Retrieved
756:
747:
735:. Retrieved
725:
670:
649:
645:
636:
619:
606:
598:
595:
376:
371:
162:
153:
144:
140:
133:prime broker
107:
96:
87:
76:
49:
29:
27:
1302:Yield curve
1215:Terminology
1167:Hedge Funds
1060:Mutual fund
1000:Investment
687:practicing
681:tax evasion
610:hedge funds
558:Isle of Man
550:Isle of Man
354:Isle of Man
344:Isle of Man
93:Structuring
1380:Categories
1137:Unit trust
1045:Hedge fund
1035:Index fund
1004:structures
947:2014-10-01
717:References
587:Regulation
486:Luxembourg
460:Luxembourg
308:Luxembourg
300:Luxembourg
146:licensed.
103:unit trust
68:Luxembourg
1281:Convexity
792:1 October
768:1 October
737:1 October
667:Criticism
602:investors
127:custodian
37:domiciled
1359:Category
1277:Duration
695:See also
633:Offshore
628:Taxation
592:Offshore
442:Guernsey
432:Guernsey
414:Delaware
406:Delaware
336:Guernsey
326:Guernsey
218:Delaware
210:Delaware
64:Delaware
1092:(QIAIF)
919:manner.
903:13 July
870:13 July
642:Onshore
616:Onshore
580:<1%
572:<1%
562:<1%
554:<1%
544:<1%
536:<1%
526:<1%
522:Bermuda
518:<1%
514:Bermuda
504:Ireland
496:Ireland
366:<1%
358:<1%
348:<1%
340:<1%
330:<1%
290:Ireland
272:Bermuda
264:Bermuda
246:Ireland
121:manager
72:Ireland
58:or the
1256:Theory
1158:Active
1098:(REIT)
827:
764:. HMSO
478:Jersey
468:Jersey
318:Jersey
254:Jersey
56:Jersey
39:in an
1343:UCITS
1202:Value
1112:SICAV
1026:(FCP)
1020:(ETF)
1014:(CCF)
941:(PDF)
934:(PDF)
897:(PDF)
890:(PDF)
864:(PDF)
857:(PDF)
787:(PDF)
673:ATTAC
576:Malta
568:Malta
400:%age
394:%age
362:Malta
282:Malta
186:%age
180:%age
1367:List
1002:fund
905:2014
872:2014
825:ISBN
794:2014
770:2014
739:2014
454:11%
436:11%
428:11%
418:72%
410:64%
386:AUM
240:11%
232:10%
222:22%
214:20%
204:52%
196:45%
172:AUM
66:and
20:The
508:1%
500:3%
490:4%
482:6%
472:5%
464:9%
446:7%
322:2%
312:3%
304:4%
294:3%
286:5%
276:4%
268:6%
258:5%
250:8%
113:an
28:An
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1279:,
691:.
131:a
125:a
119:a
54:,
1283:)
1275:(
984:e
977:t
970:v
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