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How to set up an investment fund in EU

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Written by A.S.

March 8, 2015 at 1:13 am

How long it takes to launch a new investment fund in EU

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It should be around 5-6 months, providing that the founders and managers are acceptable to the regulators. It takes about 1 month to prepare documents for the regulator and they’re likely to use most of the 6 month period  allowed to them for decision to approve or deny licence.

It took us about 18 months. But we started at the very grass roots level and there were a lot of issues to consider, not least how to ensure client confidenciality. Most of our clients are based in Europe and the legislation is likely to change so that it is very difficult to market offshore funds in Europe. So the choice was to register the fund in Europe. The next decision to be made was in which country. Traditional fund domiciles like Ireland and Luxembourg were considered initially alongside with Switzerland. All of those are the highest cost countries for fund registration. Switzerland has an disadvantage of being outside European Union.

Our final choice was Malta for a number of reasons. It is EU country, the regulator is efficient (something we felt is true after the first meeting with the regulator there), business language is English and the registration costs are a fraction of what they would be in Ireland or Luxembourg. Malta currently is still a small, but the fastest growing fund domicile in EU.

There were thousands of email exchanges with prospective service providers (custodians, administrator, auditor, brokers …) and legal counsel. In typical situation this would be more simple, but in this case the fund principals did want to double-check every single detail themselves and a lot of time and effort was spent on understanding how even the slightest detail in the whole setup works.

I’m happy how it worked out this time — no mistakes were made, no cost overruns and no major delays (some minor delays were mostly due to the fact that big institutions sometimes are slow with new things). I believe the next time for the same people it would take 4-6 months to launch a new fund.

Written by A.S.

October 2, 2012 at 12:01 am