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Fund Redomiciliation allows investment funds to transfer their domicile to a new jurisdiction, offering enhanced operational and strategic advantages. For this service, we guide clients through the intricacies of the redomiciliation process, ensuring a seamless transition while adhering to legal and regulatory obligations.
Reasons for Fund Redomiciliation
There are several compelling reasons why investment funds may consider redomiciliation.
Firstly, changing the fund’s domicile to a more favorable jurisdiction can provide access to a broader investor base, enabling increased market reach and potential growth opportunities. For example, Luxembourg laws offer better opportunities for capital growth, making it a favourable destination for redomiciliation.
Additionally, a new jurisdiction can offer a more favorable legal and regulatory framework, allowing for greater operational flexibility and efficiency. Fund redomiciliation can also serve as a strategic move to align with evolving investor preferences or take advantage of tax optimization possibilities.
The redomiciliation process in Luxembourg is a straightforward process, made easier with Thales Capital. The procedure includes a few steps as follows:
- The transfer procedure in the country of origin.
- Opening a bank account in Luxembourg.
- A Luxembourg Notary witnesses the signature of the shareholder resolutions.
- Continue submitting the discontinuance to the Registry of Corporate Affairs in the country of origin.
Thales Capital’s Fund Redomiciliation service simplifies the process of transferring a fund’s domicile to a new jurisdiction.
Tax and Regulatory Considerations
Unless the owners of the new Luxembourg fund elect a vehicle granting a particular tax exemption, such as a Special Investment Fund or Venture Capital Fund, the new fund will be treated as a tax resident and subject to the standard tax rate.
Post-Redomiciliation Administration and Record-Keeping
Following the successful redomiciliation of a fund, Thales Capital provides comprehensive support in the post-redomiciliation phase. Our dedicated team offers assistance in establishing new operational structures, adapting existing policies and procedures to the new jurisdiction, and ensuring compliance with local regulations. We prioritize effective record-keeping practices to maintain transparency and facilitate audits, reinforcing trust and confidence in our clients’ operations.
Redomiciliation Risks and Mitigation Strategies
Changes in regulatory requirements and legal frameworks in the new jurisdiction might lead to compliance issues. To avoid that, we conduct a thorough due diligence on the new jurisdiction’s regulations and legal requirements before initiating the redomiciliation.
Also, moving to a new jurisdiction can expose the fund to different market conditions, currency fluctuations, and economic risks. This is why we conduct a thorough market analysis of the new jurisdiction and imply our best risk mitigation strategies.
By carefully navigating the legal, tax, and regulatory landscape, we ensure a seamless transition while mitigating risks and optimizing operational efficiency. Trust us to guide you through the complexities of fund redomiciliation, enabling you to unlock new growth avenues and better cater to the evolving needs of your investors.