Dear friends:
I am new to this forum and this is my first post. I am from India and have been investing my own funds and running 2 partnerships in India for the past 11 and 4 years respectively. I became a convert after reading Warren Buffett's "Letter to BRK shareholders" on the BRK website.
I like to think I have some understanding of Indian markets. I have written a few articles about it - the latest one can be found here
Wide Moat investing in India. I would welcome comments from any of you.
I am looking to set-up a small partnership in Singapore for investing in the Indian markets. This would serve like a collective investment scheme and the size will not exceed USD 5 million. Typically such a structure would involve setting up an LLP and so on.
What I wanted to know was if members of this forum can guide me to the broad rules / regulations / possibilities of setting this up.
Thank you very much in advance.
Warm regards
diffsoft Wrote:I am looking to set-up a small partnership in Singapore for investing in the Indian markets. This would serve like a collective investment scheme and the size will not exceed USD 5 million. Typically such a structure would involve setting up an LLP and so on.
What I wanted to know was if members of this forum can guide me to the broad rules / regulations / possibilities of setting this up.
There are 3 ways to legally manage money in Singapore:
1. Retail license
You can invest on behalf of anyone - taxi driver, car salesman etc. No limits.
2. Licensed A/I
You can invest on behalf of qualified investors. Qualified means (for individuals) $2m in net assets or $300k in annual income, or (for corporations) $10m in net assets.
3. Registered
You can invest on behalf of up to 30 qualified investors. Qualified means (for individuals) $2m in net assets or $300k in annual income, or (for corporations) $10m in net assets.
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For full details get the regulations off the MAS website at:
http://www.mas.gov.sg/~/media/MAS/Regula...g2012.ashx
Note that even the registered category requires 2 representatives in Singapore, each with 5 years' relevant experience. You will also need to station the CEO in Singapore. The fund management company also needs to have $250k in paid-up capital (which can be invested in the fund). The licensed categories have substantially stiffer requirements.
(27-08-2012, 03:17 PM)d.o.g. Wrote: [ -> ]...Note that even the registered category requires 2 representatives in Singapore, each with 5 years' relevant experience. You will also need to station the CEO in Singapore. The fund management company also needs to have $250k in paid-up capital (which can be invested in the fund). The licensed categories have substantially stiffer requirements...
@ d.o.g: Thank you for your response. I have just gone through the above referred documentation on the MAS site. The rules were so refreshingly clear! I am based in India for now and will be the CEO, moving myself to Singapore.
Just one more query - does the FMC have any restriction on how much capital it can invest in the fund? I do understand that SGD 250K is the
barest minimum that needs to be the FMC capital at ALL times.
Thanks once again.
diffsoft Wrote:Just one more query - does the FMC have any restriction on how much capital it can invest in the fund? I do understand that SGD 250K is the barest minimum that needs to be the FMC capital at ALL times.
From what I recall, no corporate entity (including the FMC) can be over 50% if there are less than 10 investors, or 30% if there are 10 or more investors.
If you bust these limits, the offending investor becomes taxable AND the fund itself becomes a taxable entity (which means the offending investor is taxed twice).
Note that tax exemption for funds is NOT automatic. The fund has to meet various criteria. You should speak to a lawyer on these matters. Or you can read the entire Securities and Futures Act, plus all the subsidiary legislation, and hope you didn't miss anything. I'd suggest the lawyer.