Lawyers and Int'l Investment folks! ? about investing offshore money in the USA.

Factual Questions
1

We’re in the beginning stages of putting a Hedge Fund together. We’ve been testing the idea for awhile and seem to be doing fine for a low-volatility fund (2.7% YTD, 9% Std. Dev, -0.05 correlation to the S&P). We trade using zero transaction cost US mutual funds (Rydex & Profunds) based in DC. We have potential offshore money investors from South Africa.

How do we get that offshore money onshore without paying US taxes? I’ll be talking to lawyers soon enough to iron out the details, but I was hoping someone might know about this so I could start thinking about it.

How I think it will work is this:

We get an offshore fund and management company (BVI, Caymans). The main General Partner of the company will be a US Limited Liability Company, which will have a Tax Ident. Number (TIN) that we can use to invest in the mutual funds.

-OR-

There is some US tax law that allows offshore management companies to invest onshore without paying US taxes, or maybe only on certain types of securities (bonds?)

Anyone have a clue?

Thanks-
-Tcat

2

Bump

3

I think that this is the type of question that is simply too technical for a good answer on this type of general interest message board. If that were my area of law (it’s not but others in my office do some hedge fund work), I wouldn’t feel comfortable giving that type of advice on a message board.

I’d say that questions about the tax implications of offshore investments in hedge funds are better asked to competent, retained legal advisors. Sorry.

4

Thanks-

Yeah, I knew this would be hit or miss, I was just hoping. I have a list of lawyers, I just need to decide on which one to contact.

-Tcat