Set Up a Cryptocurrency Hedge Fund in Singapore

Fintech and the investment funds sectors go hand in hand in Singapore, which is one of the most important financial centers in Southeast Asia. Singapore is also known as one of the most advanced financial centers in the world when it comes to creating a legislation on the use of cryptocurrencies.

Professional investors interested in taking advantage of these regulations in combination with the legislation which favors the opening of investment funds can create cryptocurrency-based investment funds in Singapore. One of the most suitable investment vehicles for such a fund is the hedge fund.

Below, our Singapore company formation specialists explain how to open a cryptocurrency fund in the city-state. You can rely on us if you need professional help in creating a cryptocurrency hedge fund in Singapore.

Legislation on cryptocurrency hedge fund creation in Singapore

The hedge fund is one of the simplest ways to starting an investment fund in Singapore, however, it targets high net worth individuals. The main characteristic of the hedge fund is pooling money from more investors with the purpose of investing them in order to generate significant amounts of money in a short period of time. This is why a cryptocurrency hedge fund is a great business idea in Singapore.

In order to open a cryptocurrency hedge fund in Singapore, an investor must consider several laws, among which the Securities and Futures Act which will provide for use of the digital tokens as financial instruments in the fund, the Financial Advisers Act which covers the aspects related to the management of the hedge fund, and the guidelines issued by the Monetary Authority of Singapore (MAS) which provides for the creation and sale of virtual money.

If you decide to open a company in Singapore with the purpose of setting up a cryptocurrency-related business, our local agents can assist you.

Requirements for setting up a Singapore cryptocurrency hedge fund

The creation of a cryptocurrency hedge fund must start with the Singapore company formation procedure of a structure through which the fund will market its products which, in this case, will take the form of digital tokens.

In order to create a hedge fund in Singapore, one must consider the following:

• – the registration of a business form suitable for an investment fund is mandatory in Singapore;
• – the fund must also obtain an authorization for its operations from the Monetary Authority;
• – the manager of the fund, also known as intermediaries, must be licenses by the same authority;
• – under certain circumstances, the hedge fund must also issue a prospectus which must be approved by the Monetary Authority;
• – in order to be considered a financial instrument, the cryptocurrency must take certain forms under the Singapore law.

Among the agreed forms of virtual currency upon the creation of a hedge fund in Singapore, cryptocurrency can take the form of shares, debentures or unit in the fund.

Our consultants can help you open a company in Singapore with the purpose of setting up a cryptocurrency hedge fund here.

What is the simplest way of creating a Singapore cryptocurrency hedge fund?

The simplest way of setting up a cryptocurrency hedge fund is by registering a fund which requires no prospectus. In order to achieve that, the investment fund owner must consider the following:

1. the fund must issue an offer which is subject to specific licensing criteria as imposed by the Monetary Authority of Singapore;
2. the offer must have a value of less than 5 million SGD or its equivalent in a foreign currency;
3. the offer cannot surpass a 12-month period and is subject to other conditions imposed by the authorities;
4. the offer must take the form of a private offer and will target no more than 50 investors for 12-month period of time;
5. the offer can be made to institutional investors or accredited ones, under certain conditions;
6. the cryptocurrency hedge fund must also respect certain restrictions related to its advertisement.

If you decide to open a cryptocurrency hedge fund, our advisors can help you open a company in Singapore under which you can run your investment fund.

Other aspects related to opening a crypto hedge fund in Singapore

Those who decide to set up an investment fund and use it for offering cryptocurrencies in Singapore, must know that if they decide to use the digital tokens as units in Collective Investment Schemes (CIS) must comply with additional requirements. Among these, they must adopt a certain conduct and respect the restrictions imposed under the law.

Intermediaries must also set up primary or trading platforms through which the offering of cryptocurrencies is made.

If you need help in creating a cryptocurrency hedge fund, please contact our company registration agents in Singapore.