International Law

DUTCH CARIBBEAN HEDGE FUNDS

By Karel.Frielink

Curacao provides a favorable climate for hedge funds

Curacao, part of the Netherlands Antilles, currently provides a favorable tax, legal and regulatory climate for hedge funds. A fund vehicle can be established quickly and flexibly. Additionally, the current regulatory regime for the supervision of investment institutions and administrators and the anti-money laundering rules provide comfort for investors. In Curacao one can discuss with the tax authorities in advance what at arms? length remuneration will be acceptable. A tax-exempt vehicle and several very low-tax vehicles are available for hedge funds.

There is no requirement from the point of view of corporate law for a hedge fund to have any employees and it may have a single managing director (which may even be a corporate entity) who may be domiciled elsewhere. There are no specific statutory formalities to comply with regarding meetings of the managing (or supervisory) board, such as the location thereof.

Both open- and closed-end funds are possible. The license requirement has many exclusion, exemption and dispensation possibilities. Master/feeder structures, multi class, umbrella funds and hybrid debt/equity structures are all possible.

For these and other reasons I believe that Curaçao is still developing as a jurisdiction of choice, and with some decent marketing this should become apparent to the world at large.

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on May 13, 2008 (boomark / email).