Valsen Fiduciaries Funds

Cayman Exempt 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 Exempt Fund

This are Funds which do not need to comply with the Mutual Funds Law if:

  • The equity interests are held by not more than 15 investors;
  • The majority, in number, of them are capable of appointing or removing the operator of the mutual fund (i.e. the directors of a company, the trustee of a unit trust or the general partner of a partnership).

Cayman Exempt 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
None
Quarterly obligations
None
Annual obligations
None
Other obligations
None
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 Exempt Fund:

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance restrictions
  • Friendly regulatory environment