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Seychelles Mutual and Hedge Funds:
Seychelles Mutual and Hedge Fund Act, 2008 seeks to provide for a new regulatory environment for collective investment funds, in place of the one provided under the previous Mutual Fund Act, 1997.
Seychelles jurisdiction is being positioned as an excellent alternative as a "feeder fund jurisdiction". Seychelles has also experienced remarkable growth and considered a super destination for funds investing in countries like china, Indonesia, South Africa, due to their favorable Double Taxation Treaties.
Under the Act, "A mutual fund would be a company, unit trust or partnership that pools the funds of investors and distributes the profits or gains in proportion to the shares, other interest or trust units, as the case may be, held by the investors."
The new Act provides for 3 types of funds. Professional funds open to professional or High Net Worth investors with the investment not less than USD 100,000. Private funds and Public funds form the rest. The foreign funds are allowed to operate from Seychelles, and the Fund Administrator can be outside of Seychelles.
The Act provides for a licensing of mutual funds and mutual fund administrators under the central bank of Seychelles. Licensed mutual funds and fund administrators are exempt from taxes.
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Types of Funds: Private Funds:
- A private mutual fund will have no more than 50 investors.
- A private mutual fund also prohibits any invitation to the public to subscribe for or purchase equity in the mutual fund.
- Must be recognized by the Registrar of Mutual funds.
Public Funds:
The Act defines mutual funds broadly as any “mutual fund which is not a private fund or a professional fund”. Public funds must be registered and recognized before engaging in any activity in Seychelles. The fund is required to provide the detailed information to public in the offering document. This is covered in Section 7(1) of the funds Act. Every licensed public funds shall not have less than
- Two natural persons as directors, in the case of company which is resident in or outside Seychelles
- Two natural persons as general partners
- Two natural persons as trustees.
Professional Funds:Professional funds are for professionals or High net worth investors, who need moderate regulations, with the initial minimum investment per investor being USD 100,000 or more which is allowed jointly with the spouse. Recognized Banks, Mutual funds, Insurance companies, and Securities dealer will also be considered as professional investors. Foreign exempt funds:Foreign Exempt funds are those that hold current license or authorization to operate as a mutual fund under the laws of the recognized jurisdiction. The Act also allows an exemption of procuring a licensing authority and operates from within Seychelles. Exempt foreign funds can operate from within Seychelles without a Seychelles Fund license if:
- The funds are administered by a person holding a Seychelles fund administrators license
- If the funds are domiciled or established outside Seychelles
- Listed on a recognized stock exchange and has a minimum investment of USD 100,000.
- Exempt foreign funds shall send its audited accounts of each financial year within 4 months of the end of the financial year.
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Fund Vehicle Option
- Seychelles International Business companies (IBC)
- Seychelles Special License Companies
- Seychelles International Limited Partnership (LP)
- Seychelles International Trusts
- Companies, Unit trust, or Limited Partnership constituted in a recognized jurisdiction
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