Hedge Fund Location

Couple notes, (sorry if you already know these, but judging from your username / the questions you asked I'm assuming you're starting at the begging)

1. Your physical address does not need to be where your corporation is registered. You can just hire a legal registrar to forward you all the documents.
2. As a hedge fund you want to be closest to a) talent b) your investors and c) third parties you use. That generally means NY, London, or HK/Singapore. That being said, there is no reason you can't be anywhere else in the world.
3. Hedge funds are not corporations, they are LLPs. The management company itself (the general partner) may be a corporation (though likely a S corp), but is often and LLC.
4. Legal fees to get a fund set up are likely less than ~$100k if you keep everything domestic.
5. Ongoing costs (prime brokers, Bloombergs, research, data sets, compliance, HR, payroll, legal etc.) usually make the break-even somewhere in that range you described. That being said, if you are a really small shop that doesn't have high costs, you can be a hedge fund with just the legal fee set up