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SEC Offshore Alert -- Starting an Offshore Hedge Fund The SEC's 134-page report--The Implications of the Growth of Hedge Funds--presents the current status of the hedge fund industry.  The Report includes a summary of the current status of the hedge fund industry  as well as a number of recommendations related to regulation of the hedge fund industry.   The web content authored by veteran hedge fund attorney Hannah Terhune, JD, LLM (Taxation)--when she was the Chief (and only) Attorney at GreenCompany.com and at GreenTraderLaw.com--on offshore hedge funds was cited on page 10 of the Report as providing information the SEC Staff found to be valuable in its understanding of the hedge fund industry.   Almost all of the other 300+ footnotes were to legal cases, results of the SEC-sponsored hedge fund roundtable, and FINRA/NYSE.  You will see from our website that we supply more information about hedge funds than most books on the subject. It's great to see that Hannah Terhune's expertise is appreciated by the SEC! This is quite a coup for Hannah, and provides one more piece of evidence as to how she can help you. Contact Hannah Terhune Now!

Why Start an Offshore Hedge Fund?
The number of offshore hedge funds continues to increase.  The term "offshore" means not in your home country.  Hedge funds are set up offshore usually for to save money (i.e., to avoid the expense of setting up a home country feeder fund) and also for tax or regulatory reasons.  Hedge fund managers expecting investors from abroad should consider setting up an offshore hedge fund.  With a handful of exceptions, most countries have high territorial and jurisdictional taxes.  The joke in those countries is:  "tax anything that moves."  Why would someone not from your home country want exposure to your home country's tax laws?   
 
Hedge Fund Countries
If the major consideration for establishing an offshore hedge fund is tax efficiency, both the hedge fund structure and country are important.  The majority of the hedge funds are established in low or zero tax jurisdictions (i.e., tax havens).  This means that there is no corporate level tax on hedge fund profits.  Since most hedge funds are set up as corporations and rarely declare and pay dividends to shareholders, investors (i.e., shareholders) do not have income tax to declare in their home country.  

For a new hedge fund manager who is a small operator (i.e., the basement startup) and for whom the extra costs are a major burden, the best location to launch an offshore hedge fund is the United States, the British Virgin Islands, the Bahamas, or the Seychelles, or the Cayman Islands.  These countries have generous hedge fund and tax laws, allowing hedge funds to start out as unregulated funds with the option to convert to regulated hedge funds. U.S. based hedge fund managers expecting U.S. tax-exempt investors (i.e., retirement accounts)  should consider setting up an offshore fund as well.  It is not necessary to set up a regulated hedge fund.  In fact, for smaller operators, it is better  to set up a hedge fund structure that allows it to operate as an unregulated hedge fund.  Setting up a regulated hedge fund takes more time and money.  In our experience and in terms of hedge fund optics, the two best countries to set up an unregulated hedge fund are the United States and the British Virgin Islands.
 
The reason why we do not prefer the Cayman Islands is because it takes more time and money to set up a hedge fund there.  The Cayman Islands allows for four (4) types of hedge funds, two (2) of which are important to fund managers starting a small offshore fund. Those types of funds are the Category 4(3) Fund and the Category 4(4) Fund.  While the Cayman Islands does not involve much due diligence by the Cayman Islands Monetary Authority (CIMA) during the incorporation process, it is slow.  Even a smaller hedge fund has to be registered with CIMA under the Mutual Funds Law.  This means identifying all service providers to the fund and providing certain information about the fund and the offering of its securities and CIMA has to be notified of any subsequent changes.  The Category 4(4) fund (i.e., which is used for incubator hedge funds) authorizes one share class and all investors in the fund can vote.  This problem does not arise in a U.S. or BVI incubator hedge fund.  For this reason, the two best countries to set up an unregulated hedge fund are the United States and the British Virgin Islands.

Why the United States?
Even if you are based in another country, consider forming a U.S. hedge fund. The United States offers easy low cost access to the legal, tax, accounting, retail and institutional brokerage, and regulatory services needed by a hedge fund sponsor to organize a hedge fund.  Despite what some investors think about the purported negativity surrounding the United States, many more investors continue to establish U.S. based hedge funds because of the minimal expenses associated with starting a U.S. hedge fund.  Hedge fund sponsors (i.e., the organizer(s) of the hedge fund) based outside the United States are usually surprised and delighted to learn about the “light touch” of U.S. regulation and low costs associated with forming a U.S. hedge fund. The United States is a tax haven for foreigners.  Click Here to Learn More About U.S. Incubator Hedge Funds and Starting a U.S. Hedge Fund  The best news of all is that U.S. hedge funds can be marketed just like retail funds as a result of a recent law change.  There is no longer an ban on advertising.  Click Here to Learn More About Raising Capital for a Hedge Fund  This puts it at the top of the list as one of the best countries for hedge funds.

Why Consider a Master-Feeder Structure
Confusing to some is the use of onshore and offshore feeder funds in a master-feeder hedge fund structure. The master-feeder structure allows a hedge fund manager to manage money for a broad spectrum of investors.  The master fund, structured in most cases as an offshore corporation, engages in all trading activity on behalf of the investors in the feeder funds.  Typically, investors do not invest directly into the master fund.  A hedge fund manager can pool investor money into home country feeder fund and "feed" monies into the offshore master fund. If offshore investors exists, an offshore feeder fund can be established for them in their home country or in another country.  Trading gains and losses are allocated to the feeder funds based on the percentage assets under management in each feeder fund.
 
Many variations of the foregoing structure exists and the variations, at least in the United States, are driven by the pursuit of the U.S. tax lawyer's Holy Grail:  preservation of the low tax rate on the carried interest.  This tax zen delights only in (1) preserving the tax status of the "carried interest" that exists from the payment of performance allocations or (2) creating a "carried interest" by converting a performance fee to a performance allocation for U.S. tax purposes.  This is the purpose of the mini-master fund structure (see below).
 
U.S. Feeder Hedge Fund with Offshore Master Hedge Fund
If you are a U.S. based fund manager, consider setting up an offshore fund if you manage money for foreign and/or U.S. tax-exempt individuals and businesses.  Under U.S. income tax laws, a tax-exempt organization (such as an ERISA plan, a foundation, or an endowment) engaging in an investment strategy that involves borrowing money is liable for a tax on "unrelated business taxable income" (UBTI), notwithstanding its tax-exempt status.  The UBTI tax can be avoided by the tax-exempt entity by investing in offshore hedge funds.  The master feed hedge fund structure typically includes a U.S. limited partnership (unless multiple share classes are needed; in that case, the hedge fund is a limited liability company) as the U.S. feeder hedge fund for U.S. taxable investors and a foreign corporation as the offshore feeder hedge fund for foreign investors and U.S. tax-exempt investors.   A master hedge fund is formed offshore as well.  The master hedge fund, structured as an offshore corporation, should file a Form 8832 with the Internal Revenue Service (e.g., a check-the-box election allowing the master hedge fund to be treated as partnership for U.S. tax purposes), before engaging in trading activity on behalf of the feeder hedge funds.

Some investment managers try to skip the offshore master fund to save money and attempt to use the offshore feeder hedge fund as the master hedge fund. However, If U.S. taxable investors invest in or effectively control the offshore hedge fund, complex U.S. tax rules applicable to controlled foreign corporations, foreign personal holding companies, or passive foreign investment companies (PFIC) become problematic.

U.S. Investors and Offshore Funds
Offshore hedge funds are generally organized as corporations for marketing, tax, and legal reasons.  Less frequently, offshore hedge funds will elect to be treated as a partnership for U.S. tax purposes to attract U.S. individual investors as well as participate
in master-feeder fund arrangements.  When U.S. investors are involved, a master-feeder structure typically includes (in addition to the master fund) a U.S. limited partnership (LP) or limited liability company (LLC) as the feeder fund for U.S. taxable investors and a foreign corporation as the offshore feeder for foreign investors and U.S. tax-exempt investors.  If an offshore feeder corporate fund is set up for U.S. tax-exempt investors (i.e, a UBTI blocker), it them makes sense to elect on IRS Form 8832 to have the master fund taxed as a partnership for U.S. tax purposes.  This election will simplify tax issues for investors in the U.S. feeder fund.
 
U.S. Tax Issues for Offshore Funds
Whenever, U.S. taxable investors invest in or control an offshore hedge fund, some complex U.S. tax issues are in play.  Key U.S. tax issues encountered by any hedge fund with U.S. taxable investors include:  passive foreign investment company (PFIC) rules, controlled foreign corporation (CFC) rules, U.S. tax reporting rules, effectively connected income (ECI) rules, withholding tax rules and income tax treaties; and unrelated business taxable income (UBTI) rules.  However, these rules are manageable when knowledgeable tax advisors are on board.
 
PFIC rules work as an anti-tax deferral mechanism.  A offshore hedge fund taxed as a corporation is classified as a PFIC when either (i) at least 75% of its gross income is “passive income;” or (ii) at least 50% of the average value of its gross assets are “passive.”  These rules can just creep in.  For example, a U.S. taxable investor in a U.S. fund of funds (FOF) may have tax issues if the U.S. FOF invests in a PFIC.  That is because the investor is treated for U.S. tax purposes as investing directly in the foreign fund.  If the foreign fund also invests in a foreign fund, it's treated as a subsidiary PFIC and the U.S. taxable investor is treated as owning a pro rata share of the subsidiary PFIC.  The upshot of all this is that taxable gain from sale of the PFIC interest is converted from capital gain to ordinary income. 

Making of a Qualified Electing Fund can avoid these tax issues but a U.S. taxable investor is required to include in income annually its pro-rate share of the PFIC's annual income and gains.  The QEF election also triggers an annual income inclusion for the U.S. taxable investor even though there is no actual cash distribution (i.e., phantom income).
 
CFC rules work as anti-deferral mechanisms.  CFCs require greater than 50% ownership by U.S. shareholders (i.e., a U.S. FOF investor in an offshore fund taxed as a corporation is a shareholder) each owning more than 10% of the voting stock of the foreign fund.  This is not a common scenario.  However if the U.S. FOF or an underlying hedge fund owns a CFC then U.S. taxable investors include in income a ratable share of the investment income of the underlying CFC.  Gain from sale of the CFC interest is converted from capital gain to ordinary income (usually in part). 

If an underlying investment is both a CFC and a PFIC, the CFC rules apply if the U.S. FOF owns more than 10% of the CFC.
 
U.S. Tax Reporting.  In any year that a U.S. FOF has a 10% percent or greater interest in a foreign fund, either directly or indirectly through an underlying hedge fund that is a partnership for U.S. tax purposes, IRS form 5471 is completed for that year. Much information is needed from the foreign fund to complete the Form 5471.
 
ECI.  Foreign investors and foreign funds are taxed on income that is effectively connected to the conduct of a U.S. trade or business (ECI).  An offshore Fund is subject to U.S. tax if it is engaged in a U.S. business.   An offshore fund that invests in a U.S. partnership (i.e., a U.S. fund or FOF) is treated as engaged in a U.S. Business.  An offshore fund is then taxed as the regular corporate tax rate on its allocable share of U.S. income.  In addition, the 30% branch profits tax applies, subject to a reduced tax treaty rate, if applicable.   An offshore fund engaged in a U.S. Business, is required to file U.S. federal income tax returns and failure to file a U.S. tax return within 18 months of its due date causes the offshore fund to be taxed on its gross income as U.S. ECI without any deductions allowed.  Although investing in or trading U.S. stocks, securities and commodities is not considered to be the conduct of a U.S. business, certain activities or investments by an offshore hedge fund formed as a partnership may give rise to it being engaged in a U.S. business, including:  investment in a U.S. pass-through entity (e.g. a U.S. LLC) that is engaged in an active operating U.S.business, loan origination activities, distressed debt investment, investments in U.S. real property interests and being a dealer in securities.

Mini-Master Offshore Fund
In this structure a offshore master hedge fund is formed and elects to be treated as a partnership for U.S. tax purposes.   A stand-alone (i.e., feeder fund) U.S. hedge fund funnels its cash into the offshore master hedge fund.  All trading takes place in the offshore master hedge fund, which is more efficient.  The offshore master hedge fund is structured as a limited partnership and its general partner is itself another partnership.  The general partner is allocated the performance allocation and receives the allocation of performance fee.  This allows the hedge fund manager to receive what would normally be a currently-taxed performance fee a partnership allocation in the form of tax-favored, long-term capital gains and qualified dividends.  This allows the hedge fund manager to defer current taxation of the entire performance fee (as a performance allocation typically include an element of unrealized gain).

Why the British Virgin Islands?
The British Virgin Islands (BVI) is an attractive and affordable country for hedge funds.  The laws in the BVI are very modern and well-regard internationally. The BVI government has successfully created a framework that is rigorous in terms of anti-money laundering and know-your-customer requirements.  The BVI offers a suitable level of regulation for private, professional, and public funds combined with flexibility and offer great value for the money.  It's considerably less expensive to establish a fund in the BVI than comparable countries such as the Cayman Islands, Bermuda and the Bahamas.
 
We particularly recommend the British Virgin Island (BVI) incubator hedge fund for start-up fund managers.  This is a very unique hedge fund option not available in most other countries.  Learn More About Incubator Hedge Funds   A BVI incubator hedge fund -- a "closed-ended" fund -- is not regulated by the BVI Financial Services Commission (FSC).  It is a fully legal hedge fund structure.  Its authorization is contained within the Memorandum & Articles of Association (M&A) of a BVI multiple share class entity.  
 
The BVI incubator hedge is structured in the same manner as a regulated hedge fund but an investor does not have an absolute right to redeem shares on demand.   Rather the M&A limits the right of investors to redeem shares on demand.  Instead, the right to redeem is left to the sole discretion of the hedge fund's director.  If and when the BVI incubator hedge fund is converted to a BVI regulated hedge fund, its M&A is amended to include a right to redeem on demand for the shareholders.
 
Do not let the words "closed-ended" confuse you. The BVI incubator hedge fund -- even though called "closed-ended"  -- can accept investor subscriptions on a continuous basis and is identical to private, professional, and public funds in that regard.  The BVI closed-ended fund structure can be upgraded to either a private, professional or public fund in the future, if desired.  Of these categories, a public fund is the best option for a retail hedge fund; however it is the most expensive type of fund to establish (and therefore out of reach for most start up hedge funds).
 
Sponsors and fund managers considering a BVI fund may choose to structure the fund as one of the following:  a BVI business company, a limited partnership or a unit trust.  The majority of BVI investment funds are established as companies limited by shares under the Business Companies Act (2004).  Limited partnerships are also a common form of investment fund, while unit trusts are relatively rare. If it is set up as a company, it is not a  simple IBC.  It does not require BVI directors or the filing of audited financial statements.  A separate investment management company, custodian, administrator or auditor is not required.  However, having those arrangements in place will help you sell shares in your hedge fund.  In a BVI incubator fund, it is possible to charge performance, management and other fees. Learn More About Performance Fees   The BVI closed-ended incubator hedge fund can be marketed as a retail hedge fund.  There are no restrictions on marketing.  In addition, when offering documents are prepared, it functions just like any other hedge fund in the world.
 
The offshore incubator hedge fund can be offered with or without hedge fund offering documents.  It is very important that the restricted redemption rights of investors are fully disclosed in the fund's offering documents.  Learn More About Offering Documents  Such restricted redemption rights may cause some prospective investors to be hesitant to invest in the fund.   However, when the closed ended hedge fund is properly marketed by word of mouth to personal and business associates, friends and relatives, the restrictive redemption rights should not pose a problem.  Learn More About Hedge Fund Marketing  There are no restrictions with respect to raising capital for the BVI incubator hedge fund and marketing efforts should be focused on the fund's performance.  Learn More About Hedge Fund Performance Reports  The word "fund" cannot be used in the company name, as this is right is reserved for fully regulated funds.

BVI Offshore Hedge Funds
The BVI is a good country to set up not only an incubator hedge fund but also a full fledge hedge fund.  A BVI incubator hedge fund is easily converted to a full fledge hedge fund.  The BVI investment funds industry is regulated by the Investment Business Division of the Financial Services Commission (FSC).  The FSC is the BVI's financial services regulator and the Investment Business Division of the FSC is responsible for the regulation of the BVI's funds industry.  The industry is primarily governed by the Securities and Investment Business Act 2010 (Act).  Under Part III of the Act, and the Mutual Fund Regulations (2010), regulated funds are categorized as either private funds, professional funds, or public funds.  However, not all funds are subject to the Act, as the Act regulates only open-ended funds (whose equity interests are redeemable at the option of the investor).  Consequently, closed-ended funds (whose equity interests are not redeemable at the option of the investor) are not subject to specific regulation in the BVI.  The redemption feature represents the key distinction between closed-ended, private, professional and public funds.
 
BVI Private Funds
A private fund is restricted to either having no more than 50 investors, or only issuing invitations to subscribe for or purchase fund interests on a private basis.  In practice, however, private funds have accepted up to 300 investors.  Private funds must be recognized by the FSC before they can conduct business.
 
BVI Professional Funds
A professional fund is a fund in which the shares are made available only to professional investors, and the minimum initial investment by each such investor (other than exempted investors) is not less than $100,000 (or other currency equivalent).
 
BVI Private and Professional Fund Requirements
Private and Professional funds recognized under the Securities and Investment Business Act, 2010 (“SIBA”) are generally required to appoint an auditor and to file their audited financial statements with the Commission not more than six months after the end of each financial year.  The Act requires that a fund wishing to be recognized or registered must appoint the following functionaries: an investment manager, an administrator, a custodian, and an auditor.  However, private or professional funds may apply for an exemption from appointing an investment manager, custodian, or auditor.  In considering an application for recognition or registration, the Act requires that the manager, investment adviser, administrator and/or custodian of a BVI mutual fund satisfy the FSC’s fit and proper criteria.

The FSC has designated the following countries as recognized jurisdictions: Argentina, Australia, Bahamas, Bermuda, Belgium, Brazil, Canada, Cayman Islands, Chile, China, Denmark, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hong Kong, Ireland, Isle of Man, Italy, Japan, Jersey, Luxembourg, Malta, Mexico, Netherlands, Netherlands Antilles, New Zealand, Norway, Panama, Portugal, Singapore, Spain, South Africa, Sweden, Switzerland, United Kingdom, and the United States.
 
Private and Professional funds recognized under the Securities and Investment Business Act, 2010 (SIBA) are generally required to appoint an auditor and to file their audited financial statements with the Commission not more than six months after the end of each financial year.  The fees payable by BVI funds to the FSC are lower than those in other offshore jurisdictions.  A private or professional fund must pay a $700 application fee, and an annual fee of $1,000.  A public fund must now pay $1,000, on application for registration, and an annual fee of $1,500.  However, no fees are due and payable to the FSC for a closed-ended fund.

Deferral of Home Country Income Tax on Performance and Management Fees
A hedge fund manager of an offshore hedge fund manager must make sure that the investment management agreement between the fund and the investment manager is drafted correctly to allow for tax deferral (tougher in the United States since 2008, but possible) on management and performance fees.  The use of a properly prepared investment management agreements, offering documents, constitutional documents and outside (i.e., third party) directors, allow hedge fund managers to defer tax on performance and management fees.  A tax saving bonus results from the fact that deferred fees and earnings on the fees compound tax free in the offshore hedge fund.  Prior to 2008, U.S. hedge fund managers routinely deferred receipt of performance fees from managing offshore hedge funds. This deferral meant that the performance fee was not taxed currently.  A U.S. law change in 2008 made it a little more difficult to defer performance fees.  As a result, some hedge fund managers redrafted investment management agreements to pass muster under the new law.  Other restructured existing operations slightly to change the U.S. tax characterization of the offshore performance fee.  New hedge fund managers may consider the following structure.

UBTI and Using Blocker Entities
U.S. tax-exempt investors are taxed on the receipt of any unrelated business taxable income (UBTI).  UBTI includes income from a trade or business regularly carried on by a tax-exempt entity and generally does not include dividends, interest or capital gains.  Blockers are entities set as corporations that are placed in a structure in order to change the character of the underlying income or assets to obtain tax results that may otherwise be unavailable.  The use of blocker companies is common.   Hedge funds use blockers to prevent U.S. tax-exempt investors from recognizing UBTI and to prevent foreign investors from recognizing taxable U.S. trade or business effectively connected income (ECI).  Hedge funds use foreign corporations as blockers to invest in a hedge fund or so that the hedge fund may invest in portfolio companies.

U.S. Law Favors Offshore Hedge Funds
Despite the U.S. government's continuing  crackdown on illegal offshore accounts, offshore hedge funds remain preferred by upper-income U.S. investors when faced with a choice between an offshore hedge fund and its U.S. onshore version.  For hedge funds that use leverage, an offshore fund is preferable because of its tax advantages.   For U.S. investors, the tax savings flow from the opportunity to be taxed on net (and not gross) income and the chance to deduct state-tax and other itemized deductions thwarted by the alternative minimum tax.  In addition, investing in the offshore fund allows a U.S. investor to avoid some or all of the 3.8% Medicare tax on investment income (taking effect in 2013).  Moving assets abroad is especially useful to U.S. investors living in high tax states.

Tax Tips for Offshore Hedge Funds
When setting up the mini-master fund, the U.S. offering documents must carefully outline the calculation of the performance allocation.  Learn More About Offering Documents and Hedge Fund Fees  As a foreign pass-through entity, the manager of an offshore master hedge fund should provide Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding) to its paying agents (along with Form W-8BEN if there is an offshore feeder hedge fund and a Form W-9 for the U.S. feeder hedge fund) so that the paying agents (i.e., brokers and banks) know how much of the underlying ownership of the offshore master hedge fund is foreign to ensure proper U.S. tax withholding on U.S. dividends allocable to the offshore feeder hedge fund.  The Form W-8IMY should be updated often as offshore ownership of the offshore master hedge fund will vary as withdrawals and contributions take place (due to shareholder changes in the domestic and offshore feeder funds).  Form 8865, Return of U.S. Persons with Respect to Certain Foreign Partnerships, is the mechanism for reporting contributions and certain levels of ownership, or changes in ownership, of foreign partnerships. 

Depending on the level of ownership (and other factors) a reporting party may have to provide detailed balance sheet, income statements and other information regarding related party transactions.  A Form 8865 may have to be filed by a U.S. feeder fund and possibly even a Form 90-22.1 (Report of Foreign Bank and Financial Accounts) as the offshore master hedge fund is considered a financial account.  Learn More About Offshore Hedge Fund Tax Compliance

PERSONAL CONSULTATIONS You get answers to your specific questions by speaking directly to Hannah Terhune, an experienced hedge fund and international tax attorney.  Ms. Terhune's hard-earned knowledge and experience can be put to work to save you unnecessary steps and costly wasted effort.  The consult is an invaluable opportunity to speak to Hannah one-on-one, and learn how to achieve more in less time.  As a result, you can anticipate that the return on your investment will far outweigh the costs associated with our unsurpassed services. 

We are confident that when you are finished with your consultation, you will be impressed and more informed about your business plans than ever before. Call (307) 213-4732 or Click Here to Request Services.

ARE YOU AFRAID OF WHAT YOU DO NOT KNOW? Get answers to your specific questions by speaking directly to Hannah Terhune, an experienced hedge fund and international tax attorney. Ms. Terhune's hard-earned knowledge and experience can be utilized, as a tool, to save you unnecessary steps and costly wasted effort. The consultation is an invaluable opportunity to speak to Hannah one-on-one and learn how to achieve more in less time. As a result, you can anticipate that the return on your investment will far outweigh the costs associated with our unsurpassed services. Ms. Terhune's credentials reflect an invaluable resource that combines a well-informed professional practitioner with sound ethical judgment that Is unparalleled in the industry. The expertise required to recommend the best solutions and provide sound advice should never be taken lightly. When you are finished with your consultation, you will be both impressed and informed about your business plans.  Contact Hannah Terhune now!

We have both regulatory experience and the understanding of the foreign exchange and securities markets.  Each client receives personalized attention from our attorneys and staff.   No client is too large or small though because of our boutique size.  We pride ourselves in providing personal attention to each client. CMSG provides the best services and support needed for hedge funds and business projects.  No need to coordinate work between different firms--we handle the entire business process from start to finish.  We offer accounting, tax planning services, tax return preparation, business consulting, and U.S. and international company formation services.  Our professionals provide the highest quality services at  competitive rates.  But don't take our word for it, give us a call and let us prove what we can do for you. Read our Leading Media Articles, Customer Testimonials and learn more About Us.

WHY HIRE US? When you hire us for hedge fund you get a unique combination of securities, tax, and international experience, focused on the trader niche. We are one destination for special hedge fund and trader tax needs. We think we have the best set of offering documents based on the current and ever changing federal, state, and offshore securities, commodities, and tax laws. We aim to and deliver quick turnaround times. 

We understand that clients want to begin business as soon as possible. We conceive, structure, and deploy the best strategies. Our customers value our one-stop shop relationship. We help you start your business and continue to assist you. Our tax services affiliate handles accounting, software, and tax compliance, including all tax matters (tax planning and tax returns). Only one thing counts with us and that is our customer relationships!

We conceive, structure, and deploy the best tax saving strategies into your hedge fund vehicle (for the benefit of the manager and their investors) and your management company. Investors value tax-savings strategies and we utilize all our special knowledge and ideas in this area.  Our customers value our one-stop relationship.   We will help you start your business and continue to assist you. 

MEET ATTORNEY HANNAH M TERHUNE Hannah Terhune, a hedge fund and international tax attorney, contributes her expertise, experience and thoughts to many digital content media and magazine repositories. Hannah Terhune's articles are widely circulated on the Internet and recommended by TheStreet.com and other respected media.  Hannah Terhune's articles will advance your knowledge and understanding of the industry. They are embraced worldwide as a definitive and reliable source of critical information.  Contact Us for Articles & Reprint Rights

Strategic Hedge Fund Planning by Hannah Terhune.  Canadian Hedgewatch (March 2012).

Offshore Hedge Funds: Focus on Master/Feeders by Hannah M. Terhune (2006)

Temas Sobre Impuestos de Sociedades Colectivas para Hedge Funds en Paraiso Fiscal by Hannah M. Terhune (2006)

Gestion de los Hedge Funds de Forex by Hannah M. Terhune (2006)

Forex-Trader to Forex-Fund Manager: The Path to Success by Hannah M. Terhune (2006)

Introducing Brokers and Hedge Funds by Hannah M. Terhune (2006)

Establish a Marketable Track Record with an Incubator Fund by Hannah M. Terhune (2006)

Must I Register as a Commodity Pool Operator? by Hannah M. Terhune (2006)

Do’s and Don’ts for Crafting Hedge Fund Peformance Allocations by Roger D. Lorence Hannah M. Terhune. Derivatives Financial Products Report (an RIA publication) (September 2005)

Trading Foreign Index Contracts? Know the Tax Rules Before You Trade by Hannah M. Terhune and Roger D. Lorence. Stocks, Futures and Options (June 2005)

Practical Strategies For Section 475(f) Elections by Roger D. Lorence and Hannah M. Terhune. Derivatives Financial Products Report (WG&L/RIA,a Thompson Company) (March 2005)

Forex Hedge Fund Management by Hannah Terhune and Roger D. Lorence.  Currency Trader (March 2005).

Advising Clients on Internet Server Co-Location Agreements, Practical International Tax Strategies (March 15, 2004)

Structuring and Financing International Operations Using Hybrid Entities and Tax-Efficient Financing. Practical International Tax Strategies (Jan. 15, 2004)

Hedge Fund Compensation Arrangements. Practical U.S./Domestic Tax Strategies (Dec. 2003)

U.S. Inbound Investment – The Portfolio Interest Exemption. Practical International Tax Strategies (Dec. 15, 2003)

Business Acquisitions: Key Tax Planning Issues. Practical U.S./Domestic Tax Strategies (Sept. 2003)

Foreign Futures Planning: The 60/40 Question. Practical International Tax Strategies (Sept. 30, 2003)

Key Tax Aspects of International M&A – Planning Scenarios Involving Tax Acquisitions. Practical U.S./International Tax Strategies (Sept. 15, 2003)

Update on Spanish Holding Companies. Practical European Tax Strategies (Aug. 2003)

Reducing Operational and Exit Taxes On Closely-Held Businesses. Practical U.S./Domestic Tax Strategies (August 2003)

Coming Ashore – Establishing U.S. Operations: Practical U.S./International Tax Strategies (July 31, 2003)

Financing U.S. Business Operations Using Cross-Border Income Trust: Practical U.S./International Tax Strategies (July 15, 2003)

Methods of Compensating the Executive – An Overview of Various Tax Features: Practical U.S./Domestic Tax Strategies (May 2003)

Managing Offshore Hedge Funds – A View from the Beach: Practical International Tax Strategies (June 15, 2003)

A Practical Defense of the Family Limited Partnership: Practical U.S./Domestic Tax Strategies (May 2003)

Offshore Hedge Funds – Master/Feeder Compliance Issues: Practical International Tax Strategies (May 15, 2003)

Want a Multinational Corporation In Your Backyard? Strategic Tax Planning for Countries Without a Clue. Practical International Tax Strategies (June 15, 2001)

Planning Notes for U.S. Businesses Operating Overseas: U.S. Outbound Tax Issues. Practical International Tax Strategies (May 31, 2001)

U.S. Strategic Tax Planning and Other Modern Day X Files An FSA to Remember. Practical International Tax Strategies (May 15, 2001)

More on International Tax Planning for Highly Compensated Individuals Combining Individual Leasing Programs, Deferred Compensation and Rabbi Trusts. Practical U.S./International Tax Strategies (April 30, 2001)

International Tax Planning for Highly Compensated Individuals Taking Advantage of Special Treatment for "Rabbi Trusts." Practical U.S./International Tax Strategies (April 15, 2001)

More on Dealing with Passive Foreign Investment Companies Using Inter-Company Loans, Handling Start-Up Costs and Other Matters. Practical U.S./International Tax Strategies (March 31, 2001)

Dealing with Passive Foreign Investment Companies How the System Works and Strategies to Avoid PFIC Status. Practical U.S./International Tax Strategies (March 15, 2001)