While the investment management industry has witnessed significant growth in emerging capital markets, the US remains a key and strategic market to many investment management firms. Here in Hong Kong, we have a dedicated team of US tax specialists who can advise on a broad range of US tax issues in the structuring, operations and reporting requirements of investment funds to provide tailored solutions to meet your specific needs.
During the structuring of an investment fund, we can provide the following services:
- Advising on the structuring considerations to minimise the US tax exposure of the fund in connection with its purported investment or business activities in the US.
- Advising on the US tax implications to the investors if the fund is structured as a foreign partnership versus a foreign corporation. Investors are subject to different sets of US tax rules with respect to their share of income from a foreign partnership versus a foreign corporation (ie. passive foreign investment company ("PFIC") and controlled foreign corporation ("CFC") rules).
- Reviewing the US withholding tax and other related issues on the purported transactions of the fund. US tax rules impose complicated withholding tax and reporting requirements on income derived from US sources. These rules depend on the nature of the income and whether it is connected to the investment or business activities of the fund in the US.
- Assisting in the structuring of tax-efficient compensation arrangement for fund managers and investment advisors who are US persons or require performing their services in the US.
- Reviewing or assisting in the drafting of the US tax section of the placing memorandum of the fund. The US tax section will provide a brief summary of the US tax implications to the potential investors of the fund.
After the launch of the fund, we can continue to provide advice on the US tax matters on any purported transactions and keep you up-to-date on the changes in US tax regulations that may affect the structure and operations of the fund. We can also assist in preparing the required US tax and other information returns for the fund (ie. annual partnership return and schedule K-1s, PFIC annual information statements, etc).