Introduction and help

[diffsoft]

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

[d.o.g.]

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.

[diffsoft]

...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.

[d.o.g.]

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.