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Except for charity projects, businesspeople have profit in mind when they start a project. There are different business models, but one of the most fruitful ways to make a good return and mobilise assets is to launch investment entities. It is vital to consider the specifics of international fund regulation. Suppose you are duly and fully informed about the specific legislature of the destination you are interested in. In that case, you can get closer to this goal.

Not merely do business goals differ, but investment funds vary as well. Investors achieve better results by choosing the proper structure of an investment facility. Before registering the investment company or the start-up, professionals must work out all the

processes to the smallest detail. Some people think that lawyers like to complicate things. Still, in reality, professional legal advisors point out the risks. The client can avoid risky and punitive shortcuts even if their way seems a bit longer. These include the right jurisdiction choice, the fund's corporate form, and financial, regulatory, tax, and other issues.

Honest answer about the nature of the investment fund: golden goose or complex structure

It's more practical to elucidate the essence of an investment business entity through its perks and strengths. Suppose any business investment fund is a mere business body established under a particular jurisdiction. In that case, we must tell you there is much more to it. It can be your golden key.

Firstly as a hub, it allows to bring money together and join hands of investors to generate profits. One gets entrance to the international financial market and new capabilities via an investment fund. Investment activity by the funds benefits both economic groups: the exporter and the importer of the resource.

Advanced countries have a stake in bringing foreign capital into their system because they get another indirect tool to promote continued economic growth, modern technologies, and additional jobs. Via investment funds, businesspeople can benefit from investing in derivative financial instruments, low-risk conservative securities, traditional but volatile securities in the form of shares, and other financial instruments available on the market. Fund strategy and competent management are risk mitigation instruments for the funds. Mutual funds place investors' money in the hands of professional managers who search the market to find what investment options fit expectations, risk criteria, and profitability framework requested by the contributors.

What are the advantages and strengths of the Mutual Fund?

Like Multi Brand Boutique, the investment entity allows investors from different countries to receive multiple benefits in one place. Investors can enjoy a customised mix of investment strategies, allocate their funds in numerous financial markets, and choose different types of assets. Flexibility in acquiring and transferring assets is crucial for businesspeople interested in gaining margin with some guarantees of security and stability.

The mutual fund consists of the following "layers":

Investors (this role can also be named contributors or stakeholders);

the managing company, which performs advisory functions for contributors and ensures the allocation of money according to the approved strategy (e.g., low-risk instrument). Now, money gets ready to work: the funds become an investment portfolio. The management company complies with the law and the contributors' interests. Within its competence, it prepares a variety of investment options to choose from. Typically, the options offer different characteristics and conditions selected within the management firm's competence. The top level of the investment entity structure is called the custodian. This level ensures the protection of the contributors' assets.

How does the mutual fund work?

First comes strategy and structure. Then the technical side comes into play and starts with purchasing units of the chosen fund. Regarding fund units, we mean the net value of the fund's assets.

The profitability of the funds depends on many aspects, one of which is the profitability of the assets. It is a two-way process. Investors can purchase their fund units and, what is also essential, sell them at any time. Such flexibility comes at a price. Market volatility can contribute to growth or lower the fund's capital value. Management entities (separate companies) are in charge of finding the best solution among those available to invest contributors' money in the most profitable option with an acceptable level of risk. They may offer several fund options that differ in risk and therefore have different levels of profitability.

What kinds of investment funds are there: a short introduction

The legal basis, i.e. normative ground of the various jurisdictions willing to host a wide variety of investment entities, allows for virtually as many investor purposes as there are different funds. Below we provide a summary of the most popular options:

  • Money market funds are associated with short-term investments in fixed-income assets;
  • Non-financial funds specialise in real estate properties, and for this reason, no financial instruments are mentioned in the name of this type of institution either;
  • Hedge funds concentrate on high-risk investments, but they are attractive to investors because if everything goes well, one can maximise profits despite market trends;
  • Exchange-traded funds (well known as ETF) can be traded on the stock exchange just like shares, but there is more. This variant of investing offers high liquidity because you can arrange purchases and sales within one day. This form makes it possible to form a balanced portfolio, to pick the profitability and the package of issuers according to your expectations and values.

By the criterion of entry, there are closed and open-end funds. Both types have at least one similarity: the requirement to have professional management. It is mainly due to the necessity to handle and mitigate risks and diversify assets. Resources of the contributors are distributed according to the famous principle: "Don't put all eggs in one basket".

There are the following kinds of investment funds:

Name of the form and its characteristics

  • Open 

Mutual funds, hedge funds and ETFs are representatives of the open type entities. They are open because there is no limit to growth. The quantity is not restricted.

  • Private

This type of investment entity holds a limited quantity of issued and available investment units. Upon the initial allotment, the shares are listed on the stock exchange. Subsequent purchase is possible via the broker. These entities are controlled by the manager, which complies with the requirements of the legislation.

The level of control over the business performance and internal procedures of the investment funds depends on the composition of the investors. The second fact contributing to this matter is the nature of the investments. The collective form of investment company concentrates on the transferable form of securities in its investment business activity. The abbreviated name is well known in Europe as UCITS. As you may know, such funds are explicitly invested into money market financial instruments (for example, shares, bonds, etc.).

Choosing the best location in Europe for your investment fund

On the one hand, so many jurisdictions are open to investment activity and projects for foreigners that some businesspeople say it takes time to choose the best one. Many investors are tempted to take advantage of this open window. Still, not all of them get the expected results for several reasons. Some of them could be foreseen initially but needed to be addressed.

Before you decide to journey to register a company abroad or register an investment fund in 2024 in one of the best foreign jurisdictions, pay attention to the analysis. It is about something other than boringly collecting papers and slowing down your business intentions.

It would be best if you took time and sound advice to find out what legislation is in force, what items thereof pertain to funds, what is demanded the registration, what tax options you can choose, and a critical, even dramatic question: whether foreigner (or non-resident businessperson) is permitted to set up an investment business entity in a given country. Even the legislation in your country is likely to change quite dynamically, more to say concerning the practice in Europe and other countries. 

Among the European jurisdictions, we have selected the most favourable ones, including the United Kingdom, Liechtenstein, Luxembourg, Malta, and Switzerland.

Great Britain

The UK is rightly one of the world's leading centres for investors. Why? Because the market is indeed well-developed and open. Suppose you set up an investment fund in the UK in 2024. In that case, you will have to check the legislation plus available forms of investment entities. While setting up the investment fund on the territory of this famous jurisdiction, you will have to interact with the FCA (Financial Regulation and Supervision Body). It is possible to set up Collective Investment Schemes (widespread and popular option) in the UK in one of the forms listed below:

  • Authorised Contractual Scheme (ACS);
  • Trustee-managed AUT;
  • Variable Capital Investment Company (ICVT).

In a broad sense, investment company means the legally allowed form of investment activity. In the narrower sense, it is a set of assets purposed for the specific social-economic impact and return. Registration of a mutual fund in the United Kingdom means it is in line with strict control. All founders must comply with the strict normative requirements. The Financial Markets Act passed in 2000 states that fund managers must be authorised. Otherwise, they cannot open a mutual fund in the UK. Authorisation directly depends on the possibility of providing acceptable confirmation that sufficient financial resources are available and an efficient control system is in place.


Europeanization of your business takes little time. It is one of the most popular jurisdictions for entrepreneurs who want to set up an investment fund in 2024. It offers convenient access to the European market. Consider registering the investment fund in Lichtenstein in 2024. This location can boast political and economic stability, growth trends, a well-developed banking system, predictable economic policies, favourable taxes for foreign investors, and many other advantages. In that case, this option could be quite attractive as a tool for tax planning and asset protection. Investment funds in Lichtenstein are controlled by the FMA (Financial Market Authority), which is authorised to issue licences after examining the package of legal documents and confirming that all formal requirements provided for in the legislation, including the matter of choice of the custodian, have been adequately implemented. Applications shall be examined in the course of ten days. Still, this period may be extended if a more detailed examination is deemed appropriate. Neither government nor its official bodies create no obstacles for the business and capital inflow. The growth of investment companies helps balance the volatility in the financial markets inside the country and the EU, which reacts to geopolitical conditions, so investors and the host state have some interest in welcoming investors and their investment companies.

Foreign businesspeople in Lichtenstein must comply with effective legislation, especially for non-resident investors. We recommend exploring the below-mentioned legal acts:

  • The Law on Collective Investment in Transferable Securities, widely known as UCITS legislation (regulatory acts for open investment funds);
  • The Alternative Investment Fund Management Directive (refers to the investments that were not regulated or not regulated to the extent before the EU enacted separate legislation to fill the gaps);
  • The Law on Investment Companies.

It's important to note that even though Liechtenstein is not a member of the European Union (EU) but has a close connection with the EU system and legal standards, as a member of the European Economic Area (EEA) and is therefore subject to and governed by certain EU regulations, including those relevant to the investment facilities.

A legislative act with a long title, "The Law on Collective Investment in Transferable Securities" (UCITS), applies to open-ended investment entities marketed to the public within Liechtenstein. This legislation sets out specific demands for the organisation, management, and operation of UCITS funds, including rules on investment diversification, liquidity, and disclosure to investors.
One more fundamental legislative act (AIFMD) pertains to alternative kinds of investment funds (AIFs) not covered by UCITS legislation, such as hedge-type funds, private equity type of funds, and real estate type of funds.

This directive regulates the activity of the managers of AIFs. It sets out clear and specific requirements for the organisation, management, and operational activity of AIFs, including risk management/mitigation rules, liquidity management, and disclosure to investors. The lawmaker is working hard to eliminate blind spots and obvious legal loopholes.

One legal document offers answers to many questions. The Law on Investment Companies gives a clear legal framework for the creation, operation and supervision of investment companies in Liechtenstein. This law provides definitions and specifics of investment companies that can be established in Liechtenstein, such as public and special investment companies. It sets out specific requirements for their organisation, management, and operation. It also sets out the powers and duties of the Financial Market Authority (FMA), the regulator responsible for supervising investment companies in Liechtenstein.

Having an investment entity in this country brings many advantages. You will need to headhunt for a compliance specialist (in charge of keeping the fund's operation in line with criteria raised by the FMA), a proficient and reputable internal auditor to review the accounts and a customer complaint handler. But registration procedures include a considerable amount of documentation to obtain the licence, open a bank account and hire the specialists required for the type of fund you choose. As the specialists must be reputable and highly qualified, this means a particular salary scale and increased running costs for the company, which you will need to factor into your budget. Depending on the type of fund chosen, it may be necessary to budget for staff.
Both countries have developed effective legal frameworks to regulate investment activities and attract foreign investors.

Luxembourg has become a popular investment destination due to its favourable business climate, regulatory framework, and stable economy. The country has different types of investment funds, such as UCIs, AIFs, and sub-funds. The CSSF regulates investment entities. The SIF is one of Luxembourg's most forthcoming and popular investment vehicles. This unit may be managed or directed by a management company.

Similarly, Swiss land offers a well-developed judicial and legislative core for regulating entrepreneurial projects and investing programs of businesspeople from abroad, which consider the option to open an investment entity in Switzerland in 2024, must fully conform to the CISA familiar as the Act about Collective form of Investment Schemes (check out the full name of this legal, statutory text). The FCP, SICAV, SICAF, and LP are profit-bearing
possibilities for non-resident businesspeople in this location.

Luxembourg and Switzerland offer favourable, business-friendly climates and regulatory regimes, making them attractive investment destinations for businesspeople looking to invest in Europe.

It is important to remember that the regulations and requirements may differ across different locations in the region, and prospective investors should conduct thorough research before proceeding with any investments.

It is easier to move the enterprise in the government-supported flow. If you plan to register an investment fund in Hong Kong in 2024, you will be in the country's development strategy trend. Hong Kong experts see significant interest in involving reputable investors who help boost economic growth and bring in resources for multiple projects created in this jurisdiction daily. Official Hong Kong is actively promoting investing activities.

He has implemented new legislation, regulations, and methods to facilitate establishment and functioning of different businesses, including investment funds. Here you see flexibility, an open-minded approach of the legislator and natural perspectives for growth. This applies to limited partnership funds and open-ended funds (OFCs). As you noticed, Hong Kong has a different culture but composes similar legal forms adopted to their market realities. OFCs have their juridical person and must assign an investment manager (duly licensed) or registered with the Securities and Futures Commission (SFC) to perform regulated activities. Note: You will need to make a deep comparison and recommendation review to find a good one that fits not only legal markers but also would be easy to communicate with so that you would be confident: According to my instructions, my interest is presented correctly within the law. And one more touch for the portrait: The fund's assets must be segregated and deposited with a depositary.

In Singapore, the Variable Capital Company (VCC) has been introduced as a new legal form for all types of funds in the country. The VCC can be applied for both open-type and closed-ended variety of investment facilities and can be instituted as a standalone entity or an umbrella organisation with sub-funds. The VCC Grant Scheme has also been implemented to encourage the establishment of VCCs in Singapore and reduce costs during the grant period.

Read also: Support for investment projects.

Suppose you want to open an investment fund in the USA in 2024. In that case, it is essential to remember that hedge funds in the United States may be exempt from registration at the SEC. However, remember that they are still placed under other requirements, regulations and standards, comprising responsibility to file periodic reports and comply with anti-fraud provisions. Additionally, exemptions from standard registration requirements are only available to some types of investors, such as accredited ones. One can face such limitations on the numerical composition and other constraints depending on the kind of investors.

If you want to open an investment fund in Australia, remember that the choice of fund structure will be influenced by several factors, including the fund's size and the tax status of its members/investors. It is also essential to obtain an AFS licence unless an exemption applies.

Businesspeople interested in setting up an investment fund in Australia will see that this country offers some different features. Unit trusts are a famous structure for mutual funds in


Investors receive units in the fund representing their part of the entity's assets. While there are no limitations on the category of investments the fund may invest in, qualifying purchases in an MIT can benefit from a reduced withholding tax rate.

Investment activity has so many nuances to it that, in addition to frequently changing legislation requirements altogether, it makes it uneasy about comprehending all details relying on one's own efforts. Suppose you want to avoid unnecessary risks apparent to the professionals and may cost your business much money, including time. In that case, we recommend asking for competent advice. This initial investment will bring you a serious return on investments because professionals will help you to make a beeline towards your business objectives without unsubstantiated expenses. It is essential to consult with legal and financial advisors to ensure compliance with all applicable regulations and requirements when establishing an investment fund in either country.

Assistance in setting up an investment fund

The regulation of investment activities in all countries has changed to ensure higher transparency. When starting an investment activity, fully understanding all legal aspects in the chosen jurisdiction is essential.

Whatever the needs of our clients, the specialists at IQ Decision provide personalised advice on structuring, establishing, investing, and exiting the fund. Our regulatory, financial, risk mitigation, and dispute resolution teams offer support.