Each jurisdiction has its own unique attractions for a fund manager. While Luxembourg is traditionally an attractive option due to its long-standing track record in the fund business, Malta and Switzerland have proved to be advantageous options for new collective investment schemes. This article seeks to provide an outline of the differences between Maltese Professional Investor Funds, Swiss Alternative Funds and Luxembourg Specialised Investor Funds.

In today’s fast moving financial sphere not everyone likes to go it alone. Some may prefer to join a club or a group and pool their resources and funds and invest together over a pre-determined time period. This can be done by successfully creating a group of investors sharing a common goal, that being to combine investment opportunities, expertise, support and training.

The current legislative system of Maltese trusts and trustees is relatively new and is the result of an extensive overhaul of the trust legal system which started back in 2000 as part of Malta’s efforts to provide a specific regulatory framework for trusts and trustees while meeting its international commitments to the OECD and FATF and moving towards an onshore (rather than offshore) financial centre.

The Malta Financial Services Authority (the “MFSA”) has recently published a Guidance Note on the structuring of Shariah-compliant investment funds in Malta within the current regulatory framework applicable to investment funds, thereby paving the way for establishing Malta as a gateway to Islamic finance. The Guidance Note also identifies a number of structural issues which fund managers (mudarib) will have to consider before they can designate their fund as being Shariah-compliant.

The change is in the Funds’ domicile and, consequently, the applicable legal system, regulator and taxation framework. Two factors stand out in enhancing the attractiveness of Malta as a location for re-domiciliation: firstly, its regulator, which is known for its efficiency, approachability and commitment to the maintenance of high standards; secondly, Malta offers a highly favorable system of taxation for Investor Funds, with the exemption of income tax and capital gains tax at the Fund and non-resident investor level and its framework of double taxation treaties.

UCITS Funds ease marketing and distribution efforts. The post-financial crisis has led investors to consider regulated collective investment schemes, rather than unregulated or less regulated investment vehicles. Some hedge fund managers have converted their investment strategies into Ucits-compliant strategies to benefit from this marketing trend.

In May 2009, President Obama and Treasury Secretary Geithner announced the Administration’s international tax reform plan. The changes, if enacted, are said to be the most comprehensive tax reform since 1986. The tax reform plan is primarily aimed at curbing international tax avoidance by both US multinationals and individuals. Details of the proposed tax reform were unveiled on May 11, in the US Treasury Department’s Green Book explaining President Obama’s fiscal 2010 budget, however at the time of this writing, draft legislation has not yet been released.

These recent developments in the US have amassed the political will to bring about some revisions which Washington plans to implement to the tax code in order to address offshore tax evasion, namely the Stop the Tax Haven Abuse Act and changes to the Qualified Intermediary program.

Those involved in the Swiss hedge fund industry tell HFM Week that they are confident about future growth in the region. Finally, the Geneva finance industry and private banking sector have been active in the alternative asset management industry for a very long time. There are a lot of potential investors including banks, external assets managers, pension funds, or other institutional investors and business angles.

Les véhicules se multiplient, les juridictions se concurrencent, de nouveaux produits émergent, les anciens sont adaptés.

Quelle jurisdiction pour les hedge funds?

A bank must obtain a license from the FINMA before it can start its operations and be registered with the commercial registry[1]. Based on the Banking Act and Banking Ordinance, the following conditions must be fulfilled to obtain an authorisation to act as a bank.

Due to the large amount of middle-eastern assets deposited with Geneva-based banks, there has been a recent surge in demand for Shariah-compliant investment schemes by Swiss portfolio managers. There are constant requests for an increased amount of legal information in the Shariah compliance field. As such, this article sets forth the principles for structuring a Shariah-compliant fund in Switzerland.