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Open a Hedge Fund in Switzerland
Updated on Monday 18th July 2022 Rate this article
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Switzerland stands out as one of the main markets for the registration of offshore hedge funds. At the same time, the market is very well represented for the distribution of foreign hedge funds, as the country provides a stable regulatory framework, comprised of numerous rules of law addressing to the registration/ distribution and to the investment activities permitted through a hedge fund. Investors who want to open a company in Switzerland performing investment operations must know that the main statutory regulation for hedge funds is the Collective Investment Scheme Act (CISA); our team of consultants in company formation in Switzerland can provide in-depth assistance on the main obligations and rights deriving from this rule of law.
FINMA regulations for Swiss hedge funds
In 2015, the Swiss Financial Market Supervisory Authority (FINMA), issued a new set of regulations concerning the activities of hedge funds operated in this country. Under the latest version of the CISA, hedge funds entered under the supervision of FINMA, which imposed new regulations for the representatives of an investment vehicle registered as a hedge fund.
In the case of a foreign hedge fund operating on the Swiss market, it is now reccommended to appoint a Swiss legal representative and a paying agent, but certain exemptions from this regulation apply in the following cases:
• distribution limited to supervised financial intermediaries, such as banks and insurance companies;
• investors who have entered a written asset management agreement with a supervised financial intermediary.
These regulations were imposed after Switzerland, through FINMA, entered into a cooperation agreement with the European Union (EU) for investment activities carried out through alternative investment funds. Our team of specialists in company registration in Switzerland may offer in-depth assistance on the provisions of the agreement.
Legislation for Swiss hedge funds
Investment vehicles registered as hedge funds are regulated by a wide set of regulations, as presented below:
• Collective Investment Schemes Ordinance;
• Collective Investment Schemes Ordinance issued by FINMA;
• FINMA Ordinance on Bankruptcy of Collective Investment Schemes.
• FINMA Ordinance on Bankruptcy of Collective Investment Schemes.
Open a cryptocurrency hedge fund in Switzerland
The rise of the cryptocurrencies activities has led to the creation of numerous cryptocurrency hedge funds, including in Switzerland, one of the main destinations for companies operating in this new financial sector.
2017 represented an important moment for the development of cryptocurrencies investments, as, at a global level, investors have set up more than 120 hedge funds which had as main purpose the investments in virtual currencies. At the same time, 2017 was the year when investors registered the first cryptocurrency fund in Switzerland, already approved for activities by the country’s financial regulator. Our team of specialists in company formation in Switzerland may offer in-depth information on the legislation concerning investment funds in this country.
Investors of Swiss cryptocurrency funds
The newly created fund – Cryptocurrency Fund, was registered in Zug, the main region for fintech activities in Switzerland (cryptocurrencies included). Its founders have launched the vehicle in June 2017, being addressed to qualified investors.
As a general rule, investments in cryptocurrencies in Switzerland are performed by high net worth individuals and companies specialized in digital assets. Other important players in this field are the institutional investors, including banking institutions. Our team of agents in company registration in Switzerland can provide in-depth details on the regulations related to the types of investors allowed to invest in hedge funds.
A small share of the investors is represented by retail clients and Swiss companies that have implemented transactions in virtual currencies (especially for Bitcoin, the most popular virtual currency at a global level).
Due to the large number of investors and a general interest in virtual currencies transactions and investments, the value of the bitcoin has risen to a high degree in the last few months. In the first quarter of 2017, the value of the bitcoin was below CHF 2,000, while at the beginning of December 2017, the value increased to a record value of CHF 18,000.
Other regulations can apply in the case of Swiss hedge funds and investors are invited to contact our consultants for in-depth assistance regarding this subject.
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Being a member of BridgeWest legal network, I had the pleasure to work with colleagues at CompanyFormationSwitzerland.com. They handled successfully numerous company formation cases for my clients interested in starting businesses in Switzerland.
Mihai Cuc, Partner of MHC Law Firm