What Are Hedge Funds in Spain?
Hedge funds in Spain are Alternative Investment Funds (AIFs) designed for professional or qualified investors, with high flexibility in investment strategies. These funds are often set up as open-ended collective investment schemes with looser restrictions than UCITS funds.
⚖️ Supervised by: Comisión Nacional del Mercado de Valores (CNMV)
💼 Managed by: Authorized fund managers (SGIIC or foreign equivalents)
🧠 Key Characteristics of Spanish Hedge Funds
| Feature | Details |
|---|---|
| Investor Type | Professional/qualified only |
| Minimum Investment | Usually €100,000 or more |
| Leverage | Permitted, subject to disclosure |
| Liquidity | Can be restricted; not suitable for daily trading |
| Asset Classes | Equities, derivatives, real estate, commodities, etc. |
| Regulation | Law 22/2014 & CNMV Circulars |
| Fund Types | Hedge funds (fondos de inversión libre), umbrella funds, and feeder funds |
📌 Spain uses the term “FIL” (Fondos de Inversión Libre) to refer specifically to hedge funds.
🏛️ Legal Structure Options
📂 Sociedad de Inversión Colectiva (SICAV)
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Historically used for tax optimization (now less popular due to reforms)
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Must comply with EU investment fund regulations
📘 Fondo de Inversión Libre (FIL)
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Tailored for hedge fund strategies
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Can limit redemption rights and apply lock-up periods
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Requires a depositary and licensed manager
✅ Hedge funds may also operate under the ELTIF or RAIF structures in broader EU contexts.
📜 Regulatory Compliance
All hedge funds in Spain must comply with:
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Law 22/2014 on venture capital entities and closed-end investment entities
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CNMV registration and oversight
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AML (Anti-Money Laundering) regulations
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Annual audits and transparency reports
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Marketing limited to qualified investors under MiFID II
📎 Prospectus and fund rules must be approved by the CNMV before launch.
🌍 Cross-Border Hedge Fund Management
Foreign hedge fund managers may:
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Passport EU fund licenses into Spain under AIFMD
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Set up a local SGIIC (Spanish fund management company)
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Partner with licensed Spanish managers to handle distribution and compliance
💼 Borderless Lawyers provides full support for fund licensing, agreements, and investor relations.
🧾 Taxation of Hedge Funds in Spain
| Entity or Party | Tax Treatment |
|---|---|
| Hedge Fund (FIL) | Typically taxed at 1% corporate rate if qualifying |
| Investors | Taxed on capital gains/dividends per their residency |
| Foreign Investors | May benefit from Double Tax Treaties |
⚠️ Tax structuring must be done carefully to comply with both Spanish and EU tax laws.
💬 Real Client Scenario
Client: A Swiss asset manager wanted to launch a feeder hedge fund in Spain for Latin American clients.
Solution: Borderless Lawyers helped establish a licensed FIL in Madrid with a CNMV-approved prospectus.
Outcome: The fund raised €12M within 6 months and remained fully compliant with Spanish regulation.
🧑⚖️ How Borderless Lawyers Can Help
We guide fund managers, financial institutions, and international investors through:
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✅ Structuring and licensing hedge funds in Spain
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✅ Registering with the CNMV
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✅ Drafting prospectuses and regulatory filings
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✅ Cross-border fund compliance under AIFMD
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✅ Tax and legal optimization strategies
🌐 Multilingual team | 🎯 Financial regulatory expertise | ⚖️ End-to-end legal support
🚀 Ready to Launch or Manage a Hedge Fund in Spain?
Partner with Borderless Lawyers to structure, launch, or expand your hedge fund operations in Spain—compliant, efficient, and investor-ready.