A cryptocurrency hedge fund
allows entrepreneurs to direct their investments in a large number of underlying securities. Many types of investors, especially the ones oriented towards adverting risks, have long preferred hedge funds. The growth of the Bitcoin and other cryptocurrencies, paired with the popularity of fund investment and the evolution of blockchain technology, have led to the creation of funds oriented towards investing in cryptocurrencies.
Our Polish company formation agents
can help investors structure their hedge fund and observe the ongoing regulations in the country. When they open a cryptocurrency hedge fund in Poland, investors will need to observe a number of steps as well as pay attention to the local regulations. In Poland, the Financial Services Authority regulates investment funds and investors are also under the obligation to obtain relevant permits and licenses. Our agents can help during the setup and licensing process.
What are cryptocurrency hedge funds like?
A hedge fund gathers capital from a large number of investors and then uses it to invest in a variety of assets. Cryptocurrency hedge funds will manage only portfolios that include this specific type of assets, while mixed hedge funds can manage portfolios that include both virtual currencies and other types of assets. The first type also includes initial coin offerings, or ICOs, to the portfolio while the second is generally perceived as less risky for investment purposes.
Investors who open a cryptocurrency hedge fund in Poland can structure their fund to address accredited or institutional investors. In some cases, these types of funds will address only individual investors with w net worth over a certain amount (high-net-worth individuals).
How do investors open a hedge fund in Poland?
In a broad sense, a hedge fund is a mutual fund that is organized as a limited partnership. The method for obtaining profits is often a speculative one which in this case is combined with the volatile nature of the cryptocurrencies.
Investors will need to open a company in Poland
or a partnership for the purpose of starting a hedge fund. Next, they will want to decide upon one or more investment types that will be available for the fund. These can include direct cryptocurrency investments, blockchain investments and ICO investments or, in some cases, crypto futures.
In general, the steps for opening a hedge fund are the following:
- Gather the capital: before commencing the actual incorporation, entrepreneurs will need to gather the needed to secure enough capital for a hedge fund startup.
- Organization: this includes preparing the documents needed to open the fund as well as seeking legal representation.
- Structure: hedge funds are often alternative investment funds which can determine their own investment policy and strategy.
- Incorporate: most hedge funds are incorporated as limited partnerships; one of our agents who specialize in company registration in Poland can assist you.
- The management team: an experienced team will be required for the future hedge fund in Poland; licensed investment advisors may also be required.
Investors who start a hedge fund in Poland will also need to observe the restrictions that may apply on the marketing of alternative investment funds, either directed by the regulatory agencies or by the internal constitutive documents.
How are cryptocurrency transactions treated in Poland?
The Polish Ministry of Finance has proposed a set of guidelines for the taxation of income from cryptocurrencies in Poland, an issue that needs to be carefully considered by investors interested in this business field.
For corporate income tax
, the income from cryptocurrencies will be treated as capital gains while for individual income tax, this will also be treated as capital gains, however, it will be subject to a flat tax rate. One of our agents who specialize in company formation in Poland can give investors more details about the current taxation regime.
Hedge funds that focus entirely or partially on cryptocurrencies have the potential to benefit from this market, which remains a young and promising one, despite its volatility.
The cryptocurrency environment is a dynamic one, as shown below:
- • in 2018, there were 1,568 different cryptocurrencies, 654 tokens, and 914 coins;
- • In 2018, there were 190 cryptocurrency exchanges;
- • the number of cryptocurrencies increased by 3,08% from December 2013 to December 2017.
Investors who wish to know more about how to start a cryptocurrency hedge fund in Poland
can contact us
for more information about the local regulatory regime.