Valsen Fiduciaries Funds

Cayman Licensed 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 Licensed Fund

Licensed mutual funds are the rarest form of mutual funds regulated under the Mutual Funds Law. Unless a mutual fund falls within one of the other categories described above, it must obtain a mutual fund license. All licensed mutual funds must have a registered office in the Cayman Islands or, in the case of a unit trust, have a locally licensed trustee. An exempt mutual fund, a registered mutual fund or an administered mutual fund can voluntarily choose to be licensed.

Cayman Licensed 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

None

  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 by approved CIMA

  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 approved by CIMA.

  1. Fund administrator

  • Fund administrator required

Yes

  • Local fund administrator required

No

  • 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

No

  1. Prospectus / Offering Memorandum required to be filed

No

  1. Eligible for listing

Yes

  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 to CIMA within six months of the end of the fund’s financial year.
Other obligations

All licensed 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 Licensed 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