Mistakes to Avoid When Launching Offshore Funds

Offshore funds can be powerful, flexible vehicles—but the distance between a smart structure and a costly mess is shorter than most first-time managers expect. I’ve helped launch and repair funds across Cayman, BVI, Luxembourg, Ireland, Jersey, and Guernsey, and a consistent pattern emerges: the biggest headaches come from avoidable mistakes made in the first 90 days. What follows is a practical guide to those traps and how to sidestep them, with enough detail to help you get things right the first time.

Choosing the Wrong Jurisdiction

The first decision sets the tone for everything else. Many managers default to “Cayman for hedge, Luxembourg for private markets” without mapping investor base, marketing plans, tax goals, and operational realities. That shortcut can balloon costs, extend timelines, and make your fund harder to sell.

Match Regulatory Strategy to Investor Reality

Cayman Islands: Fast, cost-effective, and widely accepted by institutional allocators for hedge strategies, credit, and some real assets. Straightforward registration with CIMA under the Private Funds Act (private markets) or the Mutual Funds Act (hedge). Expect 4–8 weeks from document finalization to launch if you’re organized.

British Virgin Islands: Similar speed and cost advantages for smaller or emerging managers. Less signaling power than Cayman for some institutions, but works well for friends-and-family or regional capital.

Luxembourg: Favored in the EU for AIFs when marketing to EU investors at scale. RAIFs can be set up quickly (6–12 weeks) but still require an AIFM and a depositary arrangement, which raises costs. Strong institutional acceptance.

Ireland: Robust for UCITS and AIFs, especially credit, real estate, and infrastructure. ICAVs are popular. Slightly longer timelines (3–6 months for fully authorized structures) and higher costs but great distribution access.

Jersey/Guernsey: Often the sweet spot for closed-ended private equity and real assets with European LPs. Lighter touch than full EU and widely recognized by pension funds and insurers.

Common mistake: choosing Luxembourg or Ireland “because institutional” when no EU marketing is planned for the next 18 months. You’ll spend 2–3x on set-up and running costs for benefits you don’t use.

Tax Outcomes, Not Tax Postcards

An offshore domicile doesn’t erase investor tax. It merely creates a neutral platform. What matters most:

Will US investors need PFIC statements or blockers? Will ECI or UBTI arise?

Can EU/UK portfolio income access treaties? Does your holding company structure meet principal purpose and limitation-on-benefits tests?

How will management fee flows be taxed where the GP and investment manager sit?

Skipping this analysis can trigger higher investor-level tax leakage than your headline fee. I’ve seen credit funds give up 50–200 bps of net performance on avoidable withholding because nobody set up proper treaty-eligible SPVs or thought through source-country tax rules.

Substance and Economic Presence

Economic substance rules in Cayman, BVI, Jersey, and Guernsey require that certain entities demonstrate adequate governance and activity. If your fund or designated investment business entity falls into scope, you’ll need board meetings in the jurisdiction, local directors, and evidence of oversight. Faking it invites penalties and bad press. Budget for real governance (see below).

Timeline and Cost Reality Check

Indicative ranges (assuming professional service providers and institutional-grade governance):

Cayman private fund or mutual fund: $120k–$250k to launch; $150k–$400k annually (admin, audit, directors, regulatory fees, counsel, basic travel, and KYC/AML tools). Complex credit or multi-PB hedge funds skew higher.

Luxembourg RAIF: $250k–$600k to launch; $300k–$700k annually (AIFM, depositary, admin, audit, legal, regulatory, directors, CSSF filings via AIFM).

Ireland AIF: Similar to Luxembourg; UCITS costs can be higher on depositary and compliance.

Budget ranges vary widely, but if a proposal seems dramatically cheaper, look for gaps in scope: depositary-lite vs full depositary, Annex IV filing responsibilities, or technology charges hidden in the fine print.

Misjudging Your Investor Base

Build the fund for the investors you can realistically close in the next 12 months, not the ones you hope will come in year three.

US Investors: PFICs, UBTI, and SEC Rules

PFIC reporting: Non-US corporations holding passive investments can be PFICs for US investors. If you don’t provide QEF or MTM statements, many US taxable investors will walk.

UBTI/ECI: ERISA plans and foundations care deeply. If your strategy can generate UBTI (e.g., leverage in credit or real assets), consider a blocker. Direct lending, US real estate, and operating businesses often require more nuanced structuring.

SEC Marketing Rule: If you plan to market in the US or use US performance, your materials must comply with the SEC’s Marketing Rule (net of fees, clear risk disclosures, gross/net presentation, substantiated claims). Advertent missteps can shut doors with consultants fast.

ERISA 25% threshold: If “benefit plan investors” exceed 25% of any class of equity, plan asset rules can apply to the fund. VCOC/REOC status for private funds can help but must be managed from day one.

EU/UK Investors: AIFMD, SFDR, PRIIPs

AIFMD Marketing: EU marketing typically means using NPPR per country or partnering with an authorized AIFM. Reverse solicitation is not a strategy; it’s a narrow exception and widely scrutinized.

SFDR: Many EU allocators will ask your sustainability classification and for PAI reporting or exclusions. Even “No consideration of adverses” requires explicit statements that align with your strategy and data capacity.

PRIIPs KID: If you touch retail channels in the EU/UK, you’ll need a compliant KID. Most offshore alternatives stick to professional investors to avoid it—but make sure your placement approach doesn’t accidentally trip the retail definition.

Asia Considerations

Hong Kong SFC: Strict rules for marketing, even to professionals. Local licensing or chaperoning is often needed.

Singapore MAS: Regimes for accredited investors are workable but require planning. Seed relationships often hinge on a local presence or chaperone arrangement.

Mistake to avoid: assuming “friends and family in five countries” means you can email a deck and a subscription form. Cross-border placement rules are not forgiving.

Underestimating Regulatory and Filing Complexity

Even lightly regulated structures have meaningful obligations. Missing them damages credibility with investors and regulators.

Fund Authorization and Registrations

Cayman: Private funds and mutual funds register with CIMA, maintain a local auditor, and file annual returns (FAR). Private funds need valuation, custody (or verification) procedures, and cash monitoring arrangements.

BVI: Recognition under SIBA for professional funds; ongoing returns and local authorized rep.

Luxembourg/Ireland: RAIF/ICAV require AIFM arrangements, depositary, administrator, and a defined compliance calendar; local audit and approval cycles.

UK/EU NPPR: Country-by-country notifications, fees, and ongoing Annex IV reporting via AIFM or third-party provider.

FATCA and CRS

Classification, GIIN registration, and annual reporting are non-negotiable. Build investor onboarding to capture self-certifications properly. The fastest way to waste weeks: incomplete W-8/W-9 forms or conflicting tax residency data.

AML/KYC and Sanctions

Embed AML/KYC at the administrator and manager level. High-quality administrators provide screening and PEP/sanctions checks; you’re still responsible for the outcome.

Keep an eye on OFAC, UK HMT, EU sanctions changes. Frozen subscriptions and redemption blocks create operational and reputational risks. Document decisions.

Data Privacy

GDPR, UK GDPR, and other privacy regimes require lawful basis, disclosures, and vendor DPAs. If your admin or CRM sends data across borders, map it early. Avoid collecting passport data in random inboxes—use encrypted portals.

Marketing Rules and Recordkeeping

SEC Marketing Rule (if touching the US): keep substantiation files for performance, document predecessor track record eligibility, and maintain consistency across decks, PPMs, DDQs, and RFPs.

Local rules: Many jurisdictions have specific requirements for risk warnings, past performance presentations, and use of testimonials or endorsements.

Weak Governance and Board Oversight

Your board or GP committee isn’t a rubber stamp. Strong governance is a selling point; weak governance is a due-diligence fail.

Get the Right Mix of Directors

Independent directors: Use seasoned individuals with fund governance experience, not a friend doing you a favor. For Cayman, two independents plus a principal is common, with at least one director able to push back credibly.

Meeting cadence: Quarterly meetings with real agendas. Approve valuations, side letters, auditor appointment, conflicts, and changes to service providers. Keep minutes detailed and timely.

Time zones and availability: If emergency events happen (gates, side pockets, NAV suspensions), you need reachable directors. Document emergency procedures.

Conflicts Management

Affiliated broker or financing? Disclose and obtain board approval. Maintain a conflicts register.

Parallel funds and co-investments: Spell out allocation policy, rebalancing approach, and any manager co-invest. Be explicit with LPs about priority rules.

Committees That Actually Work

Valuation committee: Include at least one independent or external valuation advisor for complex or illiquid assets.

Risk committee: Useful for hedge funds with leverage or hard-to-borrow positions; set risk limits and escalation paths.

ESG/Stewardship committee: For managers making sustainability claims, ensure consistency between marketing and operations.

Sloppy Fund Documents and Terms

Documents are not templates to be rushed in a week. They define how you manage crisis, investor pressure, and regulatory scrutiny.

Align Terms with Strategy

Hedge strategies with weekly or monthly liquidity shouldn’t hold a third of their book in Level 3 assets. Mismatch is the single most common reason for gates and investor disputes.

Private funds investing in long-duration assets need adequate investment periods, recycling rules, and extension mechanics that LPs can accept.

Fees, Equalization, and Expenses

Performance fee mechanics: Clearly define crystallization points, new issue rules, and high-water marks. Avoid ambiguous language around clawbacks or series accounting.

Equalization vs series: For hedge funds, choose the method you and your admin can operate at scale. Equalization credits are efficient but require precise calculations; series are simpler but lead to share class sprawl.

Expense policy: Spell out what the fund bears (audit, admin, legal, DDV) and what the manager bears (premises, manager staff, fundraising travel). Ambiguity breeds disputes.

Liquidity Tools

Gates and suspensions: Define thresholds and processes cleanly. Include anti-dilution levies or swing pricing for UCITS-like strategies; for AIFs, consider redemption fees or soft locks where appropriate.

Side pockets: If your strategy has tail risk or opportunistic illiquid positions, define when and how to side pocket. Avoid ad-hoc inventing during stress.

Side Letters and MFN

Track commitments: If you grant fee breaks, capacity rights, or enhanced reporting, maintain a side-letter matrix. MFN elections must be managed carefully, with clear “same class” definitions and time-bounded offers.

Operational feasibility: Don’t promise bespoke reporting your admin can’t produce. Over-customization becomes a hidden tax on your team.

Key Person and Removal

Define key person events with realistic thresholds and cure periods. Investors will push for suspension of investment activity if key staff leave.

For closed-end funds, removal for cause/no-fault divorce provisions should be clear. No manager likes them, but they’re market.

Valuation and NAV Mistakes

Valuation is the beating heart of investor trust. If your process is sloppy, every other representation becomes suspect.

Build a Valuation Policy That Holds Up

Hierarchy: Adopt a fair value framework aligned with IFRS or US GAAP. Be explicit about Level 1/2/3 classification and data sources.

Methodologies: For credit and private assets, document DCF, market comps, and broker quotes—who provides them, how you challenge them, and how often.

Frequency: Match to your dealing cycles. Daily or weekly funds need robust price feeds and pricing committees with escalation rules.

Independent Checks

Use an independent pricing vendor for hard-to-value securities or at least an external review quarterly. For private funds, get periodic third-party valuations or limited-scope reviews on key assets.

Keep an audit trail. If you can’t reconstruct how a NAV was struck, you’ll struggle through audit and investor ODD.

NAV Errors and Trade Breaks

Define materiality thresholds (e.g., 50 bps of NAV or investor loss above a set amount) and correction protocols. Administrators often have policies—align them with your documents.

Maintain a trade error policy with economic responsibility. Many managers absorb principal losses from errors; make sure your PI insurance and contracts reflect that approach.

Operational Readiness Gaps

Great performance won’t save you from operational failures. Investors walk if the machine doesn’t run smoothly.

Choose Service Providers Deliberately

Administrator: Prioritize scale, technology, and investor portal quality. Test how they handle complex waterfalls, equalization, fee calculations, and FATCA/CRS workflows. Ask for named team members and their CVs.

Auditor: Pick firms respected by your target LP base. Smaller audit firms can work for emerging managers, but check their offshore credentials and independence policies.

Legal: Use counsel that has launched your specific product type in your chosen jurisdiction—don’t learn on your dime.

Prime Broker, Custodian, Depositary

Hedge funds: Don’t over-concentrate on one PB if your strategy uses hard-to-borrow names or leverage. A second PB can reduce margin drag and locate risk.

Private assets: For EU AIFs, depositary costs and duties are real. Clarify depositary-lite vs full depositary obligations, cash monitoring scope, and asset verification processes. Inconsistent interpretation creates expensive rework.

Treasury, Banking, and FX

Multi-currency share classes require a hedging policy: at fund level, share-class level, or not at all. Misaligned FX practices can add 30–100 bps of unexpected drag or volatility.

Bank onboarding: Start early. AML reviews for high-risk geographies can delay launch by weeks.

Cybersecurity and Business Continuity

Have basic controls: MFA, endpoint protection, phishing training, incident response plan, and vendor due diligence. Many allocators run cyber questionnaires now.

Test BCP annually. If your admin or manager can’t produce a SOC 1/ISAE report or similar assurance, expect pushback from institutions.

Tax Structuring Errors

Tax drives investor acceptance, net returns, and regulatory risk. Don’t “set it and forget it.”

US Tax Considerations

Blockers and UBTI: If investing in US trade or business income or using leverage that could create UBTI for tax-exempt investors, consider US or offshore blockers. Educate yourself on the trade-offs: blockers add an entity layer and potential leakage, but open doors to tax-sensitive capital.

PFIC/QEF: Offer QEF statements if you have US taxable investors; without them, many advisors will recommend passing.

Fee waivers and management company tax: Poorly implemented fee waivers risk IRS scrutiny and ordinary income characterization. Work with counsel to align waivers with real entrepreneurial risk.

State tax filings: You may trigger filing obligations in states where portfolio companies operate. Don’t assume federal structuring covers state rules.

EU/UK Withholding and Treaty Access

Use appropriate holding companies to access treaties, but ensure substance: local directors, office space, decision-making minutes, and board records. PPT and LOB tests focus on genuine purpose and control.

Be mindful of anti-hybrid rules. Interest deductibility and hybrid mismatches can negate expected tax benefits in financing-heavy strategies.

CFC, PFIC, and Investor Reporting

Non-US investors may face CFC rules in their home jurisdictions. Provide timely financials and elections where customary.

Agree early with the admin and auditor on investor tax reporting deliverables (US K-1s/1065 equivalents for blockers, PFIC statements, country-specific annexes). Set deadlines that match investor filing seasons.

Indirect Taxes

VAT/GST on management services can be significant in the EU/UK and other regions. Structure management companies and service flows to optimize recoverability and avoid surprise assessments.

Transfer Pricing

If you operate affiliates (e.g., a Luxembourg AIFM and a US sub-advisor), intercompany agreements must reflect real functions, assets, and risks. Mispricing invites audits and back taxes.

Capital Raising Traps

The best-structured fund goes nowhere if the raise stalls. A few avoidable errors reduce your odds.

Seed and Anchor Negotiations

Economics: 10–20% revenue shares, capacity rights, or management fee discounts are common. Keep expiration dates on fee breaks so you can improve unit economics as AUM grows.

Control: Avoid giving anchors veto rights that slow investment or operations. Observers on boards or advisory committees can work, but hard consent rights often scare other LPs.

Track Record Portability

Document your role in the predecessor track record. Without clear attribution letters and compliance with the Marketing Rule, you may have to rely on hypothetical backtests or limited composites.

GIPS compliance helps with institutions but is resource-intensive. If you claim it, comply fully.

Placement Agents and Chaperoning

Use regulated agents in each jurisdiction. Understand fee disclosure expectations; many LPs require explicit placement fee disclosure to avoid pay-to-play issues.

Don’t rely on “reverse solicitation” as a marketing strategy. Many regulators view patterns of communication and materials as marketing regardless of disclaimers.

Investor Communications and Reporting

Strong reporting retains investors and shortens future fundraising cycles.

Financial Statements and Audit

Decide early whether to use IFRS or US GAAP. Investors care about consistency and footnote clarity (especially valuation and related-party transactions).

Set audit timelines that align with investor tax seasons. Delays beyond 120–150 days after year-end can trigger side-eye from sophisticated LPs.

Regulatory Reporting

Annex IV: If marketing in the EU/UK, you’ll need quarterly/semi-annual Annex IV reports. Your AIFM or third-party provider usually compiles these, but data must come from your admin and risk systems.

Form PF: US advisers at certain thresholds must file. Hedge funds that cross de minimis levels face non-trivial questionnaires.

Cayman FAR, CIMA statements, local statistical filings: Calendar these with responsibility matrices.

ESG/SFDR Disclosures

If you claim Article 8 or 9 under SFDR, ensure your data and processes actually support the claim. LPs now run data checks and compare your public statements to portfolio actions.

Avoid “green by marketing deck.” A single out-of-scope holding can undermine trust.

Cost and Budget Mistakes

Many managers underestimate costs by 30–50% in year one. That creates pressure to cut corners where investors notice most.

One-off launch costs: Legal (fund docs and side letters), tax structuring, regulatory filings, offering materials, admin onboarding, audit scoping, technology, and set-up with PB/custodians. For a standard Cayman hedge fund, expect $120k–$250k before you’ve traded a day.

Ongoing: Admin, audit, tax reporting, directors, regulatory fees, data feeds, cybersecurity, insurance (PI/D&O and crime), travel for governance meetings. Budget $150k–$400k annually for a lean offshore fund; more for multi-PB or multi-entity groups.

Break-even AUM: Simple math helps. If you charge 1.5% management on $50m, that’s $750k gross revenue. After staff and overhead, fund OPEX can still be 20–40% of your total. Don’t rely on performance fees to close the gap in year one.

Timeline Planning

Rushed launches break. A realistic critical path looks like this:

Weeks 1–2: Strategy scoping, investor mapping, jurisdiction decision. High-level tax structuring. Shortlist service providers. Draft a budget.

Weeks 3–6: First draft of PPM/LPA/Articles; admin and auditor selected; KYC framework agreed; bank and brokerage applications submitted. Start AIFM/depositary discussions if EU.

Weeks 7–10: Finalize fund docs; board appointed; regulatory registrations submitted (CIMA, NPPR). Build marketing materials compliant with target regimes.

Weeks 11–14: FATCA/CRS registrations; operational testing with admin; valuation policy signed off; subscription docs loaded into investor portal.

Weeks 15–18: Soft launch/seed closing; begin trading after account readiness; complete first monthly NAV; refine reporting templates.

Add buffer if your structure crosses multiple jurisdictions. Directors’ availability and bank KYC are the usual bottlenecks.

Step-by-Step Launch Checklist

Use this as a working list with your team and counsel.

Strategy and Investor Fit

Define target investor types by country and tax profile.

Map marketing routes (US, EU/UK, Asia) and licensing needs.

Confirm liquidity profile feasible for the strategy.

Structure and Jurisdiction

Choose domicile(s) and legal form (e.g., Cayman ELP, company; Lux RAIF SCSp).

Decide on feeder/master or parallel vehicles (US taxable, US tax-exempt, non-US).

Determine need for blockers or SPVs.

Governance

Appoint independent directors and set meeting schedule.

Draft conflicts, valuation, and risk policies.

Establish advisory committee terms if applicable.

Service Providers

Administrator: finalize scope, NAV frequency, investor portal setup.

Auditor and tax advisor: agree on deliverables and deadlines.

Legal counsel across all relevant jurisdictions.

AIFM and depositary (if EU).

Regulatory and Compliance

FATCA/CRS GIIN and local filings calendar.

AML/KYC policy and sanctions screening plan.

Data privacy notices, DPAs, and recordkeeping.

Documents and Terms

PPM/OM, LPA/Articles, subscription docs with clear fee and liquidity terms.

Side letter policy and MFN mechanics.

Track record and performance disclosure aligned with local rules.

Operations and Tech

Open bank, PB, and custodian accounts; set cash management limits.

Implement cybersecurity controls and BCP.

Build valuation and pricing sources; test NAV production.

Choose data and research vendors; assign owners.

Tax and Reporting

Finalize entity chart and transfer pricing.

Determine investor tax reporting (K-1s, PFIC QEF, local statements).

Plan for Annex IV, Form PF, FAR, and audit timeline.

Capital Raising

Seed/anchor term sheets and disclosure.

Placement agent contracts and fee transparency.

Marketing calendar and CRM hygiene.

Go-Live Controls

Pre-trade risk checks and limit framework.

Trade error and NAV error policies finalized.

Investor onboarding dry runs and sub doc QA.

Strategy-Specific Pitfalls

Different strategies carry distinct traps. A few highlights:

Hedge Funds

Liquidity mismatch: Don’t offer monthly liquidity if 25% of the book is Level 3 or subject to borrow squeezes. Add gates or lock-ups as needed.

Derivatives documentation: ISDAs/CSAs take time. Margin terms drive performance. Negotiate thresholds and eligible collateral early.

Shorting and hard-to-borrow: Model borrow costs conservatively. Sudden fee spikes can erase alpha.

Private Equity and Venture

Capital call admin: Ensure your admin can handle multi-currency calls, equalization, and commitment tracking. Errors here destroy trust.

Bridge facilities: Align with LPA terms and disclose fee offsets. Cheap flexibility can turn expensive if it masks slow deployment.

Portfolio monitoring: Create templates and cadence for KPI collection; your IC and LPAC will want consistent visibility.

Real Assets and Credit

Valuation complexity: Use third-party appraisers where appropriate and define impairment triggers.

SPV management: Jurisdictional SPVs for treaty access require substance and director quality.

ESG/data: Many infra and real estate LPs require carbon, health/safety, and community impact metrics. If you can’t produce them, don’t promise them.

Digital Assets

Custody risk: Insist on qualified custodians with SOC reports. Cold storage, segregation, and key management matter more than the deck’s design.

Valuation and pricing sources: Multiple exchanges and time-weighted averaging reduce manipulation risk. Define stale price handling.

Regulatory sensitivity: Marketing rules change fast. Keep counsel on speed-dial.

Red Flags for Investors and Regulators

Overly aggressive liquidity terms for illiquid strategies.

Vague fee and expense language, especially around research, broken deal costs, and travel.

Side letters that materially change governance or liquidity without MFN transparency.

Inconsistent disclosures across PPM, deck, and website.

Weak or absent independent directors, or boards that never meet.

NAV errors without a formal correction policy; unexplained pricing variations.

Claims of “reverse solicitation” while distributing marketing decks broadly.

What Good Looks Like

High-quality launches share a few characteristics:

The structure follows investor reality: A Cayman master-feeder for US and global investors, or a Lux RAIF with a third-party AIFM for pan-European distribution, not both “just in case.”

Governance shows up in practice: Calendared board meetings, clear minutes, valuation committee decisions documented, conflicts managed.

Operations are tested: A dress rehearsal NAV before launch, trade capture and reconciliation workflows proven, and role clarity between the manager and admin.

Disclosures are consistent: Deck, PPM, DDQ, and website tell the same story; performance is presented conservatively and compliantly.

Tax is investor-centric: Blockers where needed, QEF statements for US taxable investors, treaty access documented for cross-border income, and understandable investor tax packs delivered on time.

Costs are realistic: You know your burn rate, your break-even AUM, and how anchor terms step down as you scale.

Common Mistakes and How to Avoid Them

Jurisdiction by habit: Start with a one-page memo mapping investor base, marketing plan, and tax. Share it with counsel before you choose a domicile.

Overpromising liquidity: Back-test your portfolio for liquidity under stress. If the 95th percentile unwind takes 45 days, don’t offer monthly with T+5 settlement.

DIY legal edits: Resist last-minute doc changes without counsel review. One ambiguous sentence on fees can cost more than your entire legal budget.

Ignoring AML/KYC until closing week: Collect documents early, use the admin’s portal, and set a hard internal stop date for incomplete KYC.

Valuation by “what feels right”: Codify methods, challenge quotes, and use independent checks for complex assets.

Assuming reverse solicitation will cover EU marketing: It won’t. Pick NPPR routes or a third-party AIFM.

Skipping cybersecurity: Implement MFA and phishing training at a minimum; investors increasingly ask.

A Short Playbook You Can Use Tomorrow

Write a two-page launch brief: strategy, target investors (by country and type), liquidity, structure, and key risks. Share with counsel and prospective anchor LPs.

Pick three administrators and run a real test: ask each to calculate a hypothetical NAV based on your sample portfolio and fee terms. Select the one that gets it right and explains their approach clearly.

Draft a one-page valuation policy summary: asset categories, data sources, and oversight. Use it to brief your board and auditors early.

Build an investor onboarding checklist: exact documents required by investor type and country. Time how long it takes to complete; revise until it’s friction-light but compliant.

Block two hours weekly for documentation hygiene: align deck, PPM, website, and DDQ; update as your structure evolves.

Launching offshore funds isn’t about finding the “perfect” structure. It’s about making a series of good decisions, in the right order, with the right people at the table. If you align jurisdiction with investor reality, set credible governance, nail valuation and operations, and respect the nuances of tax and marketing rules, you’ll give investors what they want most: confidence that their capital is in steady hands.