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Open a Hedge Fund in Singapore

Open a Hedge Fund in Singapore

The main legislation regulating the establishment of hedge funds in Singapore is the Collective Investments Scheme Code. Hedge funds are collective investment schemes that use different strategies of raising money for investors. The main advantage of hedge funds in Singapore is that they are allowed to use a broader pool of activities and assets in order to raise money. All hedge funds fall under the supervision of the Monetary Authority in Singapore.

Our specialists in company  incorporation can help you set up a hedge fund and any other types of funds in Singapore.They can also help you open any type of company in Singapore.

Types of hedge funds presented by our experts in opening companies in Singapore

Foreign investors looking to open hedge funds in Singapore have two possibilities:

  •           to set up an onshore hedge fund,
  •           to open an offshore hedge fund.

Onshore hedge funds are required to abide by Singapore’s licensing regulations and can be divided into:

  •           open-ended trust funds,
  •           closed-ended funds,
  •           limited liability partnerships.

Both foreign and local investors can set up onshore hedge funds in Singapore. Offshore hedge funds are registered outside Singapore and thus under different legal requirements, but are allowed to operate in the city-state.

The LLC or private limited company is the simplest business structure in Singapore. It requires a single shareholder with no restrictions on foreign ownership and a minimum number of one director. However, the director must be a Singapore resident. For support in setting up a company in Singapore through, contact our local agents.

Requirements to start a hedge fund in Singapore

There are two types of licenses one can obtain in order to open a hedge fund in Singapore:

  •           a capital market services license,
  •           a financial adviser license.

Foreign investors setting up hedge funds with less than 30 qualified investors are not required to obtain any of the licenses above.

Capital market services licenses can be obtained under the Securities and Futures Act and are suitable for the following types of activities undertaken by Singapore hedge funds:

  •           securities dealings and financing,
  •           futures contracts,
  •           fund management services,
  •           foreign exchange trading,
  •        real estate investment trusts (REITs).

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

Foreign investors providing services and advice related to investment in securities, foreign exchange trading or life insurances are required to obtain a financial adviser license under the Financial Advisers Act in Singapore.

Legislation related to investment funds in Singapore

Foreign professional investors who want to start investment funds in Singapore must comply with the following laws:

  • the Code for Collective Investment Schemes Act, also known as the CIS Regulations;
  • the Securities and Futures Act;
  • the Financial Advisers Act;
  • the Financial Advisers Regulations.

The Singapore Company Act also provides for the type of structures that can be used when opening an investment fund. Speaking of investment vehicles, at the beginning of the year the government included a new type of company for the incorporation of investment funds: the variable capital company. Our company registration agents in Singapore can offer more information on this matter.

Other types of investment funds in Singapore

The following types of investment funds can be established in Singapore:

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

These types of funds can further be divided into various sub-types, among which equity and hedge funds are among the most appreciated in Singapore.

Types of management companies and licenses for Singapore investment funds

Singapore is a highly regulated jurisdiction when it comes to creating investment funds, so it provides for several types of licenses that can obtained by administering companies.

Management companies are divided into:

  • the registered management fund company which is a company that manages assets worth SGD250 million and has the potential to attract up to 30 institutional and accredited investors;
  • the retail licensed management company which is a business that manages funds for a variety of investors, including retail and individual investors;
  • the accredited institutional licensed company – this type of business exclusively manages money for institutional and accredited investors;
  • the venture capital management company – the majority of this business’ investments are in startups. Additionally, only institutional and accredited investors may invest in this kind of business.

With respect to the licenses that can be obtained by such companies, they are divided into:

  • the Capital Markets Services (CMS) license;
  • the Financial Advisor’s license.

These licenses are issued by the Monetary Authority of Singapore.

If you want to open a company in Singapore for investment management purposes, you can rely on us.

Under the CMS license, a management company can offer the following services:

  • securities trading and funding;
  • futures contracts;
  • trading in foreign exchange with leverage;
  • providing corporate financial advice;
  • management of trusts for real estate investments;
  • supplying custodial services.

Under the Financial Advisor’s license, a company can engage in the following activities:

  • promotion of unit trusts;
  • provision of life insurance goods;
  • services for providing advice on investment goods, such as foreign exchange contracts and life insurance policies;
  • investment report issuance.

Our consultants can advise on how to set up a company in Singapore with the purpose of creating an investment fund management company. We can also handle the registration of the selected business entity for this reason.

Such a company can take one of the following corporate forms:

  • private limited liability company;
  • limited partnership;
  • company with a variable capital;
  • unit trust.

Those who wants to up offshore hedge funds, but want to provide their services in Singapore must respect certain compliance requirements. If you need help to apply for an investment license or want to open a company in Singapore you can contact our Singapore company formation agents.