This is your funds and business investment guide in the Cayman Islands. But before you read on, you may also want to check out Cayman Resident's section on Cayman's Financial Performance that details the latest statistics on investment funds.
Common investment fund vehicles used in the Cayman Islands to operate mutual funds include the exempted company, the segregated portfolio company, the unit trust and the exempted limited partnership. The exempted company may redeem or purchase its own shares and may therefore operate as an open-ended corporate fund.
Closed-ended corporate funds can also be established using the exempted company and it is a relatively straightforward procedure to convert from one to the other. The segregated portfolio company can also be established as a “Segregated Portfolio Company” (“SPC”) with protected cells or portfolios.
The SPC makes it possible to provide a means for different groups to protect their assets when carrying on business through a single legal entity. The unit trust is usually established under a trust deed with the investors’ interest held as trust units.
The exempted and limited partnership provides a second unincorporated vehicle and it can be formed as easily as the exempted company or the trust unit. An attorney can provide more information on structuring a fund in the Cayman Islands and can advise on the necessity for a license/regulation and assist in compliance with the formalities.