Small Investment Advisory offshore set up & related bank account / IB Family & Friends

Horsecap

New member
Hello there,

I am planning to set up a small offshore Investment Advisory firm to legally be able to charge performance fees as Administrator to my Interactive Brokers Family and Friends members. Can you recommend a jurisdiction to incorporate? I am currently managing/ advising only 5 "clients" (non-Us residents) with a total approx. US 2M of AUM (which may grow to 5-10 M in coming years). Key ideas for the business structure are:

1. Offshore company / jurisdiction allowed to trade in US stocks
2. Offshore company investment advisers licensing/ registration, either very easy or not required
3. Audit/ accounting annual filings either very easy or not required
4. Offshore bank account for the company to be allowed to trade with US / IBrokers and with low deposit/ minimum balance
5. Total cost of incorporation and banking set up to be low.
6. Secrecy is not a major requirement

I was thinking about BVI but hear compliance hurdles have increased considerably in past years. Someone mentioned Belize or Navis?

What about Delaware, will I have to pay taxes (and if so what %) if the Advisory is incorporated there but I am not US resident nor any of my 'clients'? Do not forget that I will be investing in US stock market.

Thanks a lot for your help!
 

SaintVince

New member
Look at similar companies.
google the services and check the top 10 companies.

inlnow several companies that do the same and the jurisdiction varies.
singapore, Cayman Islands, Bermuda these are some of the jurisdictions i know companies use.

since later you will need to provide the KYC document package to IB reach out to their customer service by phone and after a gentle foreplay with words, inquire about similar companies and where are they registered. Agents typically can tell you a general trend without disclosing customer specific info.

let us know what you decide.
 

TacitusKilgore

New member
Seychelles covers most of the requirements although I would say you need a securities license to "advise"... unfortunately I'm not sure you will find a jurisdiction that covers all of your criteria but in my opinion Seychelles comes pretty close!
 

Horsecap

New member
In which country are you resident?
In UAE

Look at similar companies.
google the services and check the top 10 companies.

inlnow several companies that do the same and the jurisdiction varies.
singapore, Cayman Islands, Bermuda these are some of the jurisdictions i know companies use.

since later you will need to provide the KYC document package to IB reach out to their customer service by phone and after a gentle foreplay with words, inquire about similar companies and where are they registered. Agents typically can tell you a general trend without disclosing customer specific info.

let us know what you decide.
Thanks Martin! I did called IB customer service and they were not helpful at all... Not sure what else I can do with them :(
BTW, is it true if incorporated in Singapore one needs to pay capital gain taxes even if investing abroad in the US stock market?
Thanks in advance
 

Horsecap

New member
Seychelles covers most of the requirements although I would say you need a securities license to "advise"... unfortunately I'm not sure you will find a jurisdiction that covers all of your criteria but in my opinion Seychelles comes pretty close!
Thanks a lot Tacitus, is it difficult/ costly to license as in Seychelles? Also I read in Seychelles auditing/ accounting filling is mandatory even for a small advisory?
 

TacitusKilgore

New member
Thanks a lot Tacitus, is it difficult/ costly to license as in Seychelles? Also I read in Seychelles auditing/ accounting filling is mandatory even for a small advisory?
I hadn't thought about the auditing for a company like yours, good pickup! - this might be a dealbreaker for you. Now that I've done some more reading I don't think Seychelles would be a good place to set up in because the 1.5% tax rate for financial licensees is only applicable when you have "economic substance" in Seychelles - ie. an office, employees, etc. New legislation coming in is making things harder for people like you who just want to set up a business.

Best of luck mate, hope things work out well for you and please update us in this thread as I am interested to hear how you end up structuring everything!
 

Horsecap

New member
I hadn't thought about the auditing for a company like yours, good pickup! - this might be a dealbreaker for you. Now that I've done some more reading I don't think Seychelles would be a good place to set up in because the 1.5% tax rate for financial licensees is only applicable when you have "economic substance" in Seychelles - ie. an office, employees, etc. New legislation coming in is making things harder for people like you who just want to set up a business.

Best of luck mate, hope things work out well for you and please update us in this thread as I am interested to hear how you end up structuring everything!
I will. Thanks a lot Tacitus!
 

Martin Everson

HNWI Offshore Consultant
Mentor Group Gold
Elite Member
I am planning to set up a small offshore Investment Advisory firm to legally be able to charge performance fees as Administrator to my Interactive Brokers Family and Friends members.
I know when I used IB's friends and family years ago you only had to tick a box saying "no advisor license is required" or similar if you were managing friends and family money. Does UAE require you to have a license for such activity or has IB become more strict with requiring you to have a license to continue to use their service?

You really don't want to setup an advisory company and deal with the headache if you can avoid it.
 
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