Currently, to satisfy safe-harbor rules and therefore not be subject to U.S. tax laws, an offshore fund must have its principal administrative office overseas. In short, the new law will allow firms to substantially reduce their operating costs for offshore funds. Preliminary Considerations and Strategic Implications of Entering the Offshore Fund Market Selecting the Right Jurisdiction. The extent to which governments are prepared to offer a flexible regulatory environment, lenient fiscal system and infrastructure support is essential in selecting an offshore fund jurisdiction. Presently, industry observers are particularly positive about Dublin because of the city's success in offering companies incentives and preferential tax treatment.
Location is another important consideration.
A major attraction of Luxembourg, for example, is its central location, making it a main center for fund distribution in markets such as Belgium, France, Germany and Switzerland. Forming a Partnership with an Established Local Player. Setting up distribution channels is arguably the greatest hurdle fund firms need to overcome in expanding offshore. To get off the ground, most firms will need to form alliances with established local players. Such alliances have become even more crucial now as local companies in many regions have become more sophisticated and have stepped up the competition with global distributors.