Valsen Fiduciaries Funds

Cayman Administered Fund

The Cayman Islands Monetary Authority (CIMA) regulates mutual funds under the Mutual Funds Law (Revised 2019). This Act sets out the guidelines pertaining to the application and licensing of mutual funds and other collective investment entities in Cayman.

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About Cayman Administered Fund

An Administered Fund is a mutual fund having more than 15 investors and not being a licensed or registered mutual fund will be an administered mutual fund (an “Administered Fund”) if its principal office in the Cayman Islands is provided by a mutual fund administrator licensed in the Islands.

Cayman Administered Fund Legal Requirements

Requirements Description
  1. Applicable legislation

Mutual Funds Law (Revised 2019)

  1. Supervising Authority

Cayman Islands Monetary Authority (CIMA)

  1. Corporate vehicle permitted

Cayman registered;

Exempted Company

Segregated Portfolio Company

Unit Trust

Exempted Limited Partnership

  1. Share capital or equivalent
  • Minimum subscription

None

  • Minimum investors

15

  1. Directors / Partners / Trustees
  • Minimum number

2

  • Corporate Directors / Partners / Trustees allowed

Yes

  • Local Directors / Partners / Trustees required

No

  1. Fund functionaries required
  1. Custodian
  • Custodian required
Yes
  • Local custodian required

No

  • Eligible custodian

Any licensed custodian in any jurisdiction and subject to CIMA approval.

  1. Fund manager / Investment manager
  • Fund manager required
Yes
  • Local fund manager required

No

  • Fund manager requires to be licensed

Yes

  • Eligible fund manager

Any licensed fund manager in any jurisdiction subject to CIMA approval.

  1. Fund administrator
  • Fund administrator required
Yes
  • Local fund administrator required

Yes

  • Eligible fund administrator

CIMA licensed mutual fund administrator providing its principal office that may be either;

A Company formed under the Companies Law (2018 Revision) (including an existing company as defined in that Law)

A foreign company registered pursuant to Part IX of the Companies Law (2018 Revision)

A limited partnership registered under the Partnership Law (2013 Revision); or

An exempted limited partnership registered under the Exempted Limited Partnership Law (2018 Revision)

  1. External auditor
  • External auditor required
Yes
  • Local external auditor required

Yes

  • Eligible external auditor

Qualified auditor approved by the Authority (CIMA)

  1. Asset Requirements
  • Restriction on type of asset class invested

None

  • Asset diversification requirements

None

  • Limitation on size of the fund or total assets under management

None

  1. Local physical office required

Yes

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

No

  1. License fees
  • License application fee

USD 4,268.29

  • Annual license fee

USD 4,268.29

  1. Estimated license processing duration

3 months

Ongoing Obligations

Requirements Description
Monthly obligations
Office Required
Quarterly obligations
None
Annual obligations
Submit annual audited financial statements and the FAR which is filed electronically to CIMA within six months of the end of the fund’s financial year.
Other obligations

All regulated funds, as long as there is a continuing offering of equity, must inform CIMA of any change that materially affects any information in the offering document and must file with CIMA an amended offering document and the relevant CIMA form incorporating such changes within 21 days.

Tax Obligations and Other Exemptions
Requirements Description
Business Tax
0% of Net Profit
Withholding Tax
No withholding tax is payable on dividends and/or interest payable.
Value Added Tax (VAT)
VAT is not applicable to mutual funds in its entirety.
Stamp duty Act
None
Trades Tax Act
None
Immovable Property Transfer Restriction Act
None
Immigration Decree
None
Exchange Control Act
None
Foreign Earnings Act
None

Benefits of a Cayman Administered Fund:

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance restrictions
  • Friendly regulatory environment
  • No exchange controls restrictions
  • Cayman is on the OECD “White List” and has signed tax information exchange agreements (TIEA) with 19 countries