Investment Funds are structures that allow you to collect money from potential investors and use it to pursue a previously intended investment goal. So, if you have a great idea for an investment scheme, setting up an Investment Fund may be a solution that interests you. An example of an investment structure is an Alternative Investment Fund registered in Estonia. What makes it different from Investment Funds in other jurisdictions?
First of all, Estonia was one of the few jurisdictions to introduce a relatively simple mechanism for registering a structure to collect funds from investors. Comparing the requirements of the Estonian legal system for an Investment Fund to other European jurisdictions and the UK jurisdiction, the Estonian solution is much simpler in terms of regulation and requires less effort to obtain the appropriate licenses and permits.
What assets can the Alternative Investment Fund in Estonia manage?
An Alternative Investment Fund in Estonia can manage total assets of up to €500 million, and registration takes between 30 and 60 days. Most importantly, the Alternative Investment Fund in Estonia can hold virtual currency assets in its investment portfolio, so it can invest in cryptocurrencies. The Estonian Financial Supervisory Authority (FSA) is one of the few in Europe that accepts investment strategies based on investing funds in cryptocurrencies. Thus, the Alternative Investment Fund in Estonia opens up opportunities for Funds that until now have not been able to realize profits from investments in such instruments. In addition to cryptocurrencies, the Alternative Investment Fund in Estonia can of course also invest its funds in “classic” investment products such as real estate, shares, derivatives and any other investment assets.
We already know that the undoubted advantage of the Alternative Investment Fund in Estonia is the much simpler registration procedure compared to other European countries and the possibility to invest in cryptocurrencies.
What should we be ready for when we want to register an Alternative Investment Fund in Estonia?
First of all, we need to set up a Limited Liability Company (OÜ), which will act as the fund manager. The company managing the Alternative Investment Fund in Estonia must obtain a license for activities covered by AML regulations (Estonian “activity license” for activities of institutions obliged under the AML and terrorist financing act). The second most important step towards registering an Alternative Investment Fund in Estonia is to obtain a license from the Estonian Supervisory Authority (FSA).
Registering an Alternative Investment Fund in Estonia is a process that requires expertise and proper guidance. However, due to a number of advantages associated with choosing Estonia for investment activity, it is definitely worth considering this country as a potential location for the Fund. The transparency of regulations and the guarantee of stability of the legal and economic system makes Estonia a great alternative to other “trendier” European jurisdictions.
If you have never thought about Estonia as a potential place for your investment activities, it might be worth changing that now and consider registering an Alternative Investment Fund in Estonia, which will allow you to develop your investment skills also in the field of cryptocurrencies. If you are interested in an Alternative Investment Fund in Estonia, please contact our lawyers, who will be happy to help you define your needs and match the right legal form to your planned activity.
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