In order to navigate the complex landscape of global finance, it is essential to have a good understanding of where to set up your fund, and this decision depends on a variety of critical factors. This guide offers a modest but detailed description of the highlights of choosing the right jurisdiction for your fund, taking into account fund type, investor demographics, regulatory pressures and geographic preferences.

Whether you are considering privacy and flexibility or globally recognized jurisdictions, our recommendations will help you gain the clarity you need to align your choices with your fund's strategic objectives and investor needs. Unlock the potential of your financial enterprise right now.
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Criteria for choosing a jurisdiction

In a world where cryptocurrencies and financial innovation are changing the rules of the game, choosing the right jurisdiction for a fund becomes a key element of a successful strategy. Not only the regulatory framework, but also operational efficiency, tax burden and growth opportunities depend on this choice. So, let's start by breaking down the key criteria to consider when choosing a jurisdiction for your fund, given the dynamic financial landscape.
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Type of fund

The selection between a strictly cryptocurrency fund and a cryptofiat fund determines not only the operating model, but also the geography of the business. For example, cryptocurrency funds have the flexibility to choose offshore jurisdictions such as, for example, British Virgin Islands (BVI) and Seashell, due to their attractive regulatory framework compliant with international requirements (FAT and so on) and the ability to easily open accounts. 

In contrast, crypto fiat funds face the need to engage brokers (Interactive Brokers, IG, XTB, City Index, etc.). And, depending on what kind of clients come in, it is necessary to have a bank or payment provider to handle fiat funds, which requires a more rigorous approach to the choice of jurisdiction.
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Investor type

The next criterion that has a strong influence on the choice of jurisdiction is the investor capital structure. This is about what kind of investors the project will have. The choice is not big: they are either large or small, that is, the difference is how much they will bring to the project — conditionally $2000, or pour hundreds of thousands and more. Which in turn will affect whether it will be a public fund or a private one.
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Regulatory pressure

Funds pay very close attention to not being pushed too hard in terms of checks, including those related to the staff formation. In order to reduce costs, foundations seek to minimize the number of local staff required and prefer jurisdictions that allow the majority of staff to be hired externally. That is, outside the country where the legal entity is established.

Thus, some jurisdictions require that most of the management staff (director, company secretary, risk officer, money laundering reporting officer, financial accountant, auditor and so on) be local. In addition, they must have certain certifications, experience, pass exams and much more. Total cost of each can start from $10-12 thousand per month. And this is a nominal amount of employees, without whom it will be impossible to manage the fund.
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Geographic focus

Finally, funds take into account the preferences of their potential investors and target audience, choosing jurisdictions that facilitate cooperation. These may be countries with developed infrastructure for working with international agreements, favorable conditions for foreign investment and subject to the three previous criteria to varying degrees. In total, these jurisdictions can be divided into three types:
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• Golden offshores. For example, the Cayman Islands, British Virgin Islands and Seychelles.
• Asia Pacific (APAC). For example, Singapore, Hong Kong, and the Philippines.
• TR-1. For example, the United Kingdom, Malta, and Switzerland. 
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Each of these criteria plays a key role in the process of selecting a jurisdiction for a fund, significantly affecting its operational efficiency, attractiveness to investors and regulatory compatibility. 

Now let's take a closer look at these jurisdictions and see if they meet any of these criteria.
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Golden offshores

This zone offers a good environment for international business, including a high level of privacy and minimal regulatory requirements. You can quickly open bank accounts and, accordingly, engage in trading and asset management, both fiat and cryptocurrency.

Minimum requirements for authorized capital and localization of the company's staff. An ideal choice for those who seek speed and flexibility.
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The Cayman Islands

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Fund Type: Supports both cryptocurrency and cryptofiat funds due to its flexible regulatory environment.

Investor Type: Attracts both large and small investors, especially those who value privacy and tax efficiency.

Regulatory pressure: Low.
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Pros:

• Confidentiality of information about owners and directors.
• Flexibility in fund structuring.
• No direct taxation.

Cons:

• May be required to comply with international regulatory standards, which increases operating costs.
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British Virgin Islands

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Fund Type: Great for crypto funds due to simplified licensing requirements and the ability to do business globally. 

Investor Type: Attracts investors of all sizes due to its flexibility and anonymity.

Regulatory pressure: Very low. Requires minimal local staff, with the ability to utilize external advisors and managers.

Pros:

• No minimum authorized capital requirements.
• Confidentiality for founders and directors.
• Flexible opportunities for structuring investments.

Cons:

• The need to comply with ever-increasing international standards of transparency.
• Reputational risks associated with "offshore" status.
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Seychelles

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Fund Type: Supports a variety of funds, including crypto and cryptofiat funds, thanks to its adaptive regulatory framework.‍

Investor Type: Ideal for investors seeking privacy.

‍Regulatory Pressure: Moderate. Requires minimal localized management, but to a lesser extent than more heavily regulated jurisdictions.

Pros:

• Confidentiality of ownership and management.
• Ease and speed of fund registration.

Cons:

• Possible difficulties in opening bank accounts due to international pressure and transparency requirements.
• Limited number of quality local service providers.

All three jurisdictions offer unique advantages for funds seeking to maximize performance and minimize regulatory burden. However, the choice of a particular jurisdiction should be driven by the specifics of the fund, its investment objectives and the needs of its investors.
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APAC

Looking for a balance between regulation and freedom of action? The Asia-Pacific region is a unique combination of a quality regulatory framework and relatively moderate oversight. It is an excellent choice for those who value prestige and seek to grow their business internationally.
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Singapore

Fund Type: Singapore supports a variety of funds, including cryptocurrency and cryptofiat funds. The country attracts asset managers through a licensing scheme for collective investment managers.

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Investor Type: Attracts both small and large investors, with a particular interest in qualified and institutional investors.

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Regulatory pressure: Medium. Requires the fund manager to be licensed or exempt from Monetary Authority of Singapore (MAS) licensing. The number of local employees depends on the size and type of operations, but the exact number may vary.
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Pros:

• High reputation and political stability.
• Developed financial infrastructure.
• Regulatory environment that supports innovation.

Cons:

• Relatively high operating costs.
• Above average regulatory requirements.
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Hong Kong

Fund type: Hong Kong welcomes both strictly cryptocurrency and cryptofiat funds, especially through a licensing scheme for securities managers.

‍Investor Type: Similar to Singapore, attracts a variety of investors, with a focus on professional and institutional investors.

‍Regulatory pressure: Moderate to high. Requires the fund manager to be licensed by the Securities and Futures Commission (SFC) of Hong Kong. Need for local staff depends on the type of license and operations.
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Pros:

• Strategically located to access the Chinese market.
• Tax incentives for funds.
• Internationally recognized jurisdiction with a high level of confidentiality.

Cons:

• Political and regulatory risks associated with policy changes.
• Relatively high regulatory and transparency requirements.
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Australia

Fund Type: Supports a wide range of investment funds, including cryptocurrency and traditional funds, with regulation from Australian Securities and Investments Commission (ASIC).‍

Investor type: Attracts mainly large and professional investors, although options are available for retail investors.

‍Regulatory pressure: Moderate. Fund registration and ASIC compliance required. The number of local staff and managers depends on the structure and size of the fund.

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Pros:

• Stable economic and political environment.
• Clear regulatory framework.
• Well-developed financial services market.

Cons:

• Relatively high regulatory compliance costs.
• Far from the world's major financial centers.
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TR1

Do you want to work and attract more investments? Ready to cooperate with leading banking institutions and major partners? Do you have a lot of money to create a business? TR1 jurisdictions are for you. It is the ideal choice for large-scale projects that require a high level of regulation and global recognition. And a great option for attracting significant investments and creating a foundation for international success.
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The United Kingdom

Fund Type: The UK supports a wide range of investment funds, including private investment companies, OEICs (Open Ended Investment Companies) and investment trusts.

‍Investor Type: Attracts both retail and institutional investors, with some emphasis on professional investors for some fund types.

‍Regulatory pressure: Moderate to high. Regulated by the Financial Conduct Authority (FCA), requiring compliance with strict governance and transparency standards. The number of local staff depends on the type and size of the fund, but a local managing director and compliance officer are required to manage certain types of funds.
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Pros:

• Steady and trustworthy jurisdiction with a mature financial market.
• Strong investor confidence.
• Good developed legal and infrastructural base for investment funds.
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Cons:

• Relatively high regulatory compliance and governance costs.
• Complicated and expensive registration and licensing procedure.
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Malta

Fund Type: Malta provides a range of structures for funds including Professional Investor Funds (PIFs) and UCITS.‍

Investor type: Especially suitable for professional and experienced investors, also offering options for retail investors.

‍Regulatory pressure: Moderate. Regulated by the Malta Financial Services Authority (MFSA). A minimum of three local staff members are needed.
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Pros:

• Transparent and flexible regulatory environment.
• The EU and eurozone provide easy access to the European market.
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Cons:

• Less international visibility compared to other jurisdictions.
• Limited choice of local professional service providers compared to major financial centers. 
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Switzerland

Fund Type: Supports a variety of investment structures, including traditional investment funds, hedge funds and private equity funds.‍

Investor Type: Attracts mainly institutional and qualified private investors due to high levels of privacy and asset protection.

‍Regulatory pressure: High. Regulated by Swiss Financial Market Supervisory Authority (FINMA), with strict licensing and governance requirements. Three local employees at the very least are required.
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Pros:

• Robust asset protection and privacy.
• High reputation and political stability.
• Attractive tax environment for investors.
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Cons:

• Difficult and expensive process of setting up and managing a fund.
• Strong regulatory and compliance needs.

Choosing the right jurisdiction for your fund is a key decision in today's dynamic financial landscape. The difficulty of this choice cannot be understated. However, no matter which jurisdiction you choose, Medici Expert offers specialized guidance on making these complex decisions, ensuring that your fund's strategy is optimally aligned with the best jurisdiction. Contact Medici Expert for expert advice and personalized support to ensure the future success of your fund. We're always in touch.