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So, what does it mean to create an investment fund in Germany or in other EU countries? In fact, this implies setting up a complete legal entity accompanied by all permits for financial and investment activities. The main source of regulation for the funds is the Investment Law. It is completely harmonized with the EU Directive governing UCITS and AIF managers.
This post is mainly focused on the regulation of investment funds in Germany and will surely come in handy for the new investors on the market.
As it often happens in modern days, investment companies choose to register in offshore jurisdictions which allows them to function under simplified registration conditions and lower to no taxation. As a matter of fact, after an offshore company obtains an appropriate license, it only takes a few months to turn it into an offshore investment fund.
However, these rules do not work in EU countries. The EU member states including Germany and other popular jurisdictions such as Liechtenstein or Luxembourg set their goals on full protection of investors and have stricter regulatory requirements.
Individuals interested in registering an investment fund in Germany should take into consideration these aspects:
Marketing of investment funds in the EU is not possible without having a regulatory permit or a European marketing passport. What was available earlier but is not allowed in Germany anymore is private placement mode. Small managers with local registration pose the only exception to this rule.
Some important fact for those planning to get an investment managing permission in Germany:
Do you need a consultation regarding establishing an investment fund in Germany or other EU countries? Contact our specialists in COREDO – we will make the process of registration smooth and worriless.