Since last year, under the background of increasing demand for overseas allocation of funds, offshore funds have become a new favorite, and more and more fund managers plan to set up offshore funds. So what is an offshore fund?

1. What is an offshore fund?

Offshore fund, also known as offshore securities investment fund, refers to a securities investment fund in which a country's securities fund issues securities fund shares in other countries and invests the raised funds in its own or third country's securities market.

Mutual funds with corporate headquarters outside Hong Kong. Most mutual funds sold in Hong Kong are registered in overseas jurisdictions such as Luxembourg, Bermuda or Dublin.

2. What are the advantages of offshore funds?

1 to avoid double taxation;

2. Distribution in kind can be made to limited partners;

3. The general partner of the fund can control the partnership enterprise to a great extent;

4. General partners can share the profits of the fund and enjoy capital gains tax treatment instead of ordinary income tax treatment;

5. Limited partnership has a limited term and is generally agreed in advance;

6. Limited partners only bear limited liability for their capital contributions, and general partners bear unlimited liability;

7. Having operational flexibility and commercial confidentiality;

8. According to section 35 1 of the revised Internal Revenue Code of the United States, limited partnerships can usually be established as tax-exempt entities.