Offshore Investment Funds

Cayman Islands l British Virgin Islands

Overview: Offshore fund vehicles are suitable for hedge and private equity fund managers seeking to attract non-U.S. and/or tax-exempt U.S. investors. In conjunction with offshore counsel, Riveles Wahab has broad experience establishing offshore funds in various structural variations, including mini-master, master feeder, parallel, and segregated portfolio company. The firm has longstanding relationships with local counsel in the Cayman Islands, British Virgin Islands (BVI), Bermuda, and other offshore jurisdictions. We advise clients as to the most appropriate offshore fund domicile and fund type taking into account investment objectives, tax considerations, target investor base, price sensitivity, and a variety of other factors. We have established open-end funds running the gamut of equity, options, forex, and futures strategies and closed-end funds focused on oil and gas lease investments, venture capital, real estate, asset backed lending, distressed company and other strategies. The firm consults with international tax counsel in structuring blocker entities and other complex offshore vehicles aimed at shielding offshore investors from “effectively connected income” and the reporting requirements associated with the Foreign Investment in Real Property Tax Act (FIRPTA).

RW’s offshore fund services include:

  • Incorporating the fund or management company entity in the offshore jurisdiction
  • Preparing first minutes, appointment of directors, resolutions and other essential corporate documents
  • Drafting memorandum and articles of association, offering memorandum, subscription documents, and investment management agreements
  • Liaison with offshore counsel to prepare fund license applications and registrations
  • Making introductions to fund functionaries, such as administrators, custodians, auditors, bankers, and brokers

Cayman Islands

With an investor-friendly legal system and a fully developed business law based upon English common law, the Cayman Islands is the jurisdiction of choice for US fund managers seeking to attract institutional capital. Riveles Wahab routinely counsels managers on the formation of category 4(3) funds, which requires a minimum initial investment of at least $100,000 by all investors, excluding persons connected to the investment manager. Our attorneys also consult on and assist in establishing category 4(4) funds, which allow open-ended funds with fewer than 15 investors to avoid CIMA registration.

British Virgin Islands

With a tax neutral environment, no regulatory restrictions on investment policies or strategies, comparably low start-up and ongoing fees and costs, and no requirement to appoint local directors, functionaries, or auditors, the BVI is the second most popular offshore jurisdiction for hedge fund formation. With several types to choose from, Riveles Wahab regularly counsels clients on selecting the best BVI fund structure for their experience level and investment strategy. Our attorneys assist in the formation and operation of closed- and open-ended funds in the BVI, including professional, private, and public funds. For new and smaller managers with fewer than 20 investors seeking to avoid the initial use of an administrator and/or auditor, RW establishes incubator and approved funds to allow our clients to build an investment strategy track record over two years before conversion into a professional or private fund, or in the case of an incubator, an approved fund.