Cayman Islands company formation

Setting up a company in the Cayman Islands attracts many entrepreneurs and investors due to its favourable tax regime, confidentiality, and relatively simple and quick incorporation process. Here is a detailed overview of the process of setting up a company in the Cayman Islands.

Selecting the type of company

Before you start the process, you need to decide on the type of company that best suits your business. There are several types of companies that can be registered in the Cayman Islands, including:

• Exempted Company: the most popular choice among foreign investors as it can conduct business outside the islands and is entitled to exemption from taxation in the Caymans for up to 20 years.
• Segregated Portfolio Company (SPC): suitable for risk management by allowing assets and liabilities to be separated into different segregated portfolios.
• Limited Partnership: a good choice for investment funds.

Company name

You need to choose a unique name for your company that is not the same as those already existing in the Cayman Islands. The name should reflect the type of company (e.g. Ltd. for limited liability).

Preparation and submission of documents

To incorporate a company, the following documents will need to be prepared and filed with the Cayman Islands Registry Office:

• Memorandum of Association.
• Articles of Association.
• Declaration of compliance with legal requirements.
• Proof of payment of state duty.

Registered office and agent

Every Cayman Islands company must have a registered office in the Islands and appoint a registered agent who will be responsible for legal and official matters.

Bank account

A corporate bank account will be required to conduct business. While this can be a complex process due to KYC and anti-money laundering (AML) requirements, having a local financial advisor can simplify the process.

Compliance with regulatory requirements

Once a company is incorporated, it is important to comply with local legal and regulatory requirements, including filing annual reports and adhering to KYC and AML policies.

Setting up a company in the Cayman Islands offers many advantages, including tax benefits and privacy. The Cayman Islands has a special tax regime, which is one of the key reasons why this offshore centre is so popular with international investors and companies.

Table showing the main aspects of taxation in the Cayman Islands

This regime provides for no direct taxes on companies and individuals, making the Cayman Islands an attractive jurisdiction for international business. It is important to note that despite the absence of direct taxes, companies may be subject to various registration and licence fees, as well as annual government fees that must be paid to maintain their status.

It is also worth bearing in mind that although the Cayman Islands does not levy taxes on companies and individuals, this does not exempt persons subject to taxation in other jurisdictions from the obligation to pay taxes in accordance with the laws of those countries where they are tax residents.

Types of companies exist in the Cayman Islands

In the Cayman Islands, there are several main types of legal entities that can be registered depending on the specifics of the business and its purpose. Here are the main types of companies:

1. Exempted Company

This is the most popular type of company among foreign investors, which involves exemption from local taxation and reporting in the Cayman Islands. Such companies can do business outside the islands and are often used for international financial transactions.

2. Ordinary Resident Company

Resident companies are intended to conduct business within the Cayman Islands and are subject to local taxation. They can provide goods and services to local residents and companies.

3. Segregated Portfolio Company (SPC)

SPC allows assets and liabilities to be split between different portfolios within a single company, providing additional flexibility and protection for investors.

4. Limited Liability Company (LLC)

Introduced recently, the Cayman Islands LLC is similar to the U.S. LLC, offering a flexible management and profit-sharing structure, as well as limited liability for members.

5. Limited Partnership (LP)

This type of structure is ideal for investment funds and entrepreneurial projects where one or more partners have limited liability and the managing partner has full liability.

6. Trusts

Trusts can also be set up in the Cayman Islands, which are an effective vehicle for inheritance planning and asset protection.

7. Foundation Company

This is a relatively new type of legal entity in the Cayman Islands, combining the features of a company and a trust. Foundation companies are ideal for long-term asset retention and can be used for charitable and private purposes.

Each type of company has its own unique characteristics and registration requirements, and provides different benefits to businesses and investors. Choosing the right type of legal entity depends on the specific goals and needs of your business.

 What is the amount of the authorised capital of a company in the Cayman Islands?

In the Cayman Islands there is no strict minimum authorised capital requirement for the incorporation of a company. This means that the authorised capital can be set at a very low level, down to a token amount, depending on the chosen company structure and its corporate objectives.

However, when registering a company, it is important to note that the size of the share capital may affect the amount of the state fee to be paid during the registration process and for the annual renewal of the licence. The amount of this fee depends on the amount of the authorised capital of the company as well as the type of company. For example, for Exempted Companies, which are one of the most popular forms of business in the Cayman Islands, the state fee is based on the amount of the authorised capital.

Therefore, although Cayman law does not set a specific minimum amount of share capital, in order to optimise the cost of government fees and to meet the corporate objectives of the company, the choice of the amount of share capital should be made taking into account all relevant factors. In any event, it is advisable to consult with Regulated United Europe‘s legal or financial advisors to determine the optimal amount of share capital based on the specifics of your business.

 Should a company in the Cayman Islands have a local director?

In the Cayman Islands, there is no requirement for a company to have a local director. Companies incorporated in the Cayman Islands can have directors of any nationality and residing in any jurisdiction. This is one of the reasons why the Cayman Islands is a popular choice for international business, providing flexibility in company management and the opportunity to utilise the international experience of the management team.

However, to ensure compliance with local legal requirements and regulations, companies in the Cayman Islands are required to maintain a registered office in the Islands and appoint a registered agent, who must be a person or company accredited in the Cayman Islands to provide such services. This provides a registered office for official correspondence and to fulfil local legal requirements.

It is important to recognise that, while the appointment of a local director is not required, companies should consider the composition of their board carefully to ensure effective governance, compliance with corporate governance and international standards of transparency. Depending on the specific nature of the company’s business and structure, it may be appropriate to include on the board professionals with international experience and local regulatory knowledge.

 What are the government fees for establishing a company in the Cayman Islands?

Government fees for incorporating a company in the Cayman Islands can vary depending on the type of company and other factors such as the amount of authorised capital. The fee structure is designed to cover various aspects of incorporating and maintaining a company within the jurisdiction. It is important to note that fee information is subject to change, so we recommend that you consult our registration agent or tax advisor for the most up-to-date information.

Some of the main fees that may be charged when setting up a company:

1. Registration fee

The registration fee depends on the type of company and the amount of its authorised capital. For example, for Exempted Companies, which are one of the most popular types of companies for foreign investors, the registration fee can start from several hundred to several thousand US dollars depending on the type of company.

2. Annual fee

Once a company is registered, an annual licence renewal fee is charged. The amount of this fee also depends on the type of company and the size of the share capital. Annual fees can be comparable to the initial registration fees and serve to keep the company in active status.

3. Additional fees

Additional fees may be charged for services related to registration, such as fees for filing certain documents, registered agent and registered office fees, and for additional licences or permits if they are required for a special type of business.

The exact amounts and details of the fee structure are subject to change and it is recommended that you consult with our professional registration agent specialising in Cayman Islands corporate law for the most up to date and relevant information before starting the process of establishing a company in the Cayman Islands.

 What is the annual cost of maintaining a company in the Cayman Islands?

The annual cost of maintaining a company in the Cayman Islands depends on many factors, including the type of company, the size of the share capital, and the need for additional services such as registered agent, registered office, management and other professional services. Here are the main components that are typically included in the annual cost of maintaining a company:

1. Annual government duties

These fees must be paid to keep the company in active status and depend on the type of company and the amount of authorised capital. For Exempted Companies, for example, annual fees can start at around 1,000 USD and can be higher depending on the authorised capital structure.

2. Registered agent and office services

Companies in the Cayman Islands are required to have a local registered office and an agent. The cost of these services can vary from provider to provider, but on average can range from 1,500 to 3,000 USD per year.

3. Accounting and auditing

Depending on the size and operations of the company, accounting and auditing services may be required. The cost of these services varies greatly and depends on the complexity of the business and the volume of operations. For small companies, it can start at a few thousand dollars a year.

4. Legal and counselling services

If a company requires advisory support on corporate governance, tax planning or other legal issues, this will also increase the annual cost. The cost depends on the scope and complexity of the services provided.

5. Additional fees

May include various administrative fees such as fees for filing amendments to company registration details, licence fees (if applicable) and others.

The annual cost of maintaining a company in the Cayman Islands can start at around 3,000 to 5,000 USD for a small company with limited operations and can increase significantly for larger companies or those requiring a wide range of professional services. It is important to consult with a Cayman Islands incorporation agent or law firm to obtain an accurate cost estimate for your company’s specific needs.

What are the main advantages of setting up a company in the Cayman Islands?

Establishing a company in the Cayman Islands offers a number of significant advantages that make this jurisdiction attractive to international investors, financial institutions and companies. Here are some of the key advantages:

1. No direct taxes

The Cayman Islands does not impose direct taxes on companies or individuals. This means there is no corporate tax, income tax, capital gains tax, dividend tax, or personal income tax.

2. International recognition and creditworthiness

The Cayman Islands is a well-known and respected jurisdiction that provides a high level of trust and reliability for businesses. This can enhance relationships with banks, investors and partners.

3. Flexibility of corporate governance

Cayman Islands law provides considerable flexibility in the structure and governance of a company, including no minimum share capital requirements, the ability to use directors of any nationality and residence.

4. Confidentiality

The Cayman Islands offers a high level of privacy for company owners and directors. While company registration and certain information is required, it is not always available to the general public.

5. Lack of currency control

There are no exchange controls in the Cayman Islands, allowing free movement of capital and facilitating cross-border transactions.

6. Stability and safety

Political and economic stability and a high level of legal protection make the Cayman Islands a reliable jurisdiction for international business.

7. Convenience for international funds and investments

The Cayman Islands is a popular choice for setting up investment funds, including hedge funds and private equity funds, due to its favourable regulatory regime.

Conclusion

Choosing the Cayman Islands to establish a company offers a combination of tax advantages, international recognition, management flexibility and privacy, making this jurisdiction attractive to many types of business and investment. However, it is important to consider the needs of your business and consult with the legal and international tax experts at Regulated United Europe to optimally structure and manage your company.

What are the different ways to incorporate a company in the Cayman Islands

Establishing a company in the Cayman Islands involves several steps and can be done in a variety of ways, depending on the specific needs of the business and the legal form of company chosen. Here are the main ways to incorporate a company in the Cayman Islands:

1. Direct registration

This is the most direct method of company formation, whereby the applicant or his legal representative directly files the necessary documents with the Cayman Islands Registry Office. This process involves the preparation and filing of the incorporation documents, such as the memorandum and articles of association, and the payment of the relevant government fees, and requires the company promoter to be present in the Cayman Islands.

2. Through a registered agent

The most common way to incorporate a company in the Cayman Islands is through a local registered agent. A registered agent not only assists in the preparation and filing of the necessary documentation but also provides a registered office for the company, which is a mandatory requirement.

3. Establishment through a specialised law firm

Many law firms in the Cayman Islands specialise in corporate law and can offer a comprehensive company formation and maintenance service. This includes advice on choosing the right type of company, preparation of all necessary documents, registration with the relevant authorities, and additional services such as corporate governance, accounting and legal support.

4. Buying a shelf company

Another option is to purchase an already registered company that has not been active (a so-called “shelf company”). This may be quicker as the company already exists and has all the necessary documents, but requires careful checking to ensure it meets your requirements.

5. Establishment of a special purpose company (SPC) or a segregated portfolio investment fund

For investors and asset managers interested in setting up investment funds or specialised financial structures, the Cayman Islands offers the option of setting up specialised legal entities such as segregated portfolio companies (SPCs) or funds.

The choice of how to incorporate depends on many factors, including specific business objectives, need for confidentiality, budget and timing. It is advisable to consult with professionals specialising in corporate law and tax planning in the Cayman Islands to ensure that your company complies with local legal and regulatory requirements.

 Is it necessary to have a registered office in the Cayman Islands?

Yes, it is mandatory for companies incorporated in the Cayman Islands to have a registered office in the Islands. This address is used as the official place for correspondence, receipt of legal notices and the storage of certain corporate documents such as the register of shareholders and the register of directors.

The registered address must be a physical address in the Cayman Islands and not just a post office box. A registered address is usually provided by a registered agent who acts as a local representative of the company and may provide additional services related to the management and administrative support of the company.

Having a registered address is an important requirement to comply with local laws and keep the company active and legal in the Cayman Islands. It also helps to ensure transparency and accessibility to government authorities and stakeholders should official communication with the company be required.

 Can I open a branch office of a foreign company in the Cayman Islands?

Yes, a foreign company can open a branch in the Cayman Islands. This process allows a foreign company to conduct business in the Cayman Islands and be subject to local law, while maintaining the legal structure and identity of the original company.

To register a branch office of a foreign company in the Cayman Islands, the following steps must be followed:

1. Preparation and submission of documents

The relevant documents must be prepared and filed with the Cayman Islands Registry Office. The documents typically include:

• Certificate of Incorporation or similar document proving the registration of the company in the country of origin.
• Constituent documents of a foreign company (charter and statutory documents).
• Decision on the intention to open a branch in the Cayman Islands.
• Appointing a local authorised representative or agent if required by law.

2. Registered address

The branch must have a registered address in the Cayman Islands to be used for official correspondence and legal notices.

3. Registration fees

When filing documents, registration fees must be paid, the amount of which may depend on the specifics and scale of the branch’s activities.

4. Compliance with legislation

The branch must comply with local laws, including but not limited to accounting, tax reporting and licensing requirements, if applicable to its operations in the islands.

Opening a branch office of a foreign company in the Cayman Islands can offer advantages such as expanding business into new markets and taking advantage of the islands’ favourable tax regime for certain activities. However, it is important to carefully consider all requirements and regulations to ensure full compliance with local law.

 Can a foreigner open companies in the Cayman Islands?

Yes, a foreigner can open a company in the Cayman Islands. This jurisdiction is attractive to international investors and entrepreneurs due to its favourable tax regime, the absence of direct taxes on companies and individual income, and by providing a high level of confidentiality and asset protection.

The following steps are usually required for foreign persons to open a company in the Cayman Islands:

1. Choosing the type of company: You need to determine which type of company is most suitable for your business, such as an Exempted Company or Limited
2. Company Name: You must choose a unique name for your company that is not the same as those already existing in the Cayman Islands.
3. Preparation and filing of documents: The relevant constituent documents, such as the memorandum and articles of association, must be prepared and filed with the Cayman Islands Registration Chamber.
4. Registered office and agent: Every Cayman Islands company must have a registered office in the Islands and appoint a registered agent, which is usually provided through a law firm or consultancy firm specialising in corporate clients.
5. Payment of government fees: Once the documents are filed, the relevant government fees for company registration must be paid.
6. Regulatory compliance: Companies may be required to comply with certain regulatory requirements depending on the scope of their business, including obtaining necessary licences.

Foreigners often turn to lawyers and international tax experts from Regulated United Europe in the Cayman Islands to facilitate the incorporation process and ensure compliance with local legal requirements. These firms can provide valuable services such as legal advice, assistance with document preparation and filing, and offer a registered office and registered agent.

 Can I get a residence permit when setting up a company in the Cayman Islands?

In the Cayman Islands, the establishment of a company does not in itself confer automatic eligibility for a residence permit. The rules for obtaining a residence permit in the Cayman Islands usually relate to investment in property, the creation of jobs for local residents or other economic contributions to the island economy. There are various programmes and categories of residence permits available for investors, entrepreneurs and highly skilled professionals.

Residence permits for investors and entrepreneurs

1. Residence permit with the right to work: Individual investors who are willing to invest in the Cayman Islands economy can apply for a residence permit that will also allow them to work for the company they have set up.
2. Residence permit for persons with an independent financial situation: This type of residence permit can be granted to persons who are able to demonstrate sufficient annual income without having to work in the Cayman Islands.
3. Direct Investment Certificate: Offers the opportunity to obtain a permanent residence permit for investors who make significant investments in the islands’ economy, for example through the establishment or purchase of a company that creates new jobs for local residents.

Application Process

The application process for a residence permit includes preparing and submitting the necessary documents, proof of financial stability, a business plan (if applicable), as well as undergoing a medical and criminal record check. The cost and investment requirements may vary significantly depending on the programme selected.

It’s important to remember

The rules and requirements for obtaining residency in the Cayman Islands are subject to change, so it is recommended that you seek up-to-date information and advice from official sources or qualified legal professionals specialising in Cayman Islands immigration law.

 What is in the articles of association of a company incorporated in the Cayman Islands?

The articles of association of a company incorporated in the Cayman Islands usually contain key provisions defining the structure, governance and rules of the company. This document is the primary corporate document that governs the internal relationships between shareholders, directors and the company itself. The articles of association (or articles of association, as it is often called in international practice) may specify the following aspects:

1. Company name: The full legal name of the company.
2. Objectives and subject matter of the company’s activities: Description of the types of activities the company may engage in.
3. Registered office address: The company’s physical address is in the Cayman Islands.
4. Authorised capital: The amount and division of a company’s share capital into shares, the types of shares a company can issue and the rights associated with those shares.
5. Details of the directors and secretary: Procedures for the appointment, powers and duties of the directors and, if applicable, the company secretary.
6. Shareholders’ rights and obligations: Including provisions on shareholders’ meetings, voting and distribution of profits.
7. Accounting and Auditing Rules: Accounting, Financial Reporting and Auditing Procedures.
8. Distribution of profits and dividends: How and when profits will be distributed to shareholders in the form of dividends.
9. Procedures for amending articles of association: Conditions and procedures required for amending the company’s articles of association.
10. Liquidation and reorganisation: Procedures for company liquidation or reorganisation, including distribution of assets.

Articles of Association must be prepared in accordance with the requirements of Cayman Islands law and submitted to the Registry Office as part of the company registration process. This is an important document that needs to be carefully drafted taking into account all aspects of the company’s business and possible risks. Many companies therefore seek the assistance of legal advisors and corporate law specialists to draft their articles of association.

 How long does it take to set up a company in the Cayman Islands?

The time taken to incorporate a company in the Cayman Islands can vary depending on various factors, including the type of company chosen, the completeness and accuracy of the documents provided, and the efficiency of the registration agent. In general, the process can take anywhere from a few days to a few weeks.

1. Document Preparation: The first step is to prepare and gather all the necessary documents, which can take anywhere from a few days to a few weeks, depending on how quickly you gather all the necessary information and documentation.
2. Filing and registration: Once prepared, the documents are filed at the Cayman Islands Registry Office. The registration process itself can be relatively quick and, in the case of electronic filing through an agent, can take as little as a few days. Some registration agents offer express registration services which can speed up the process.
3. Receipt of documents from the Chamber of Registration: Once the company is incorporated, the Chamber of Registration issues the relevant corporate documents such as the certificate of incorporation. This can also take from a few days to a week, depending on the workload of the chamber and the chosen processing speed.

In general, if all the documents are prepared correctly and there are no delays from the Registry, the incorporation of a company in the Cayman Islands can take between one and two weeks. However, you should be aware of possible delays during the preparation of documents or in the event of questions from the registration authorities.

To ensure a smooth and speedy incorporation process, it is recommended that you engage the services of an experienced Regulated United Europe incorporation agent specialising in Cayman Islands corporate law, who can assist in navigating the incorporation process and minimising potential delays.

 What activities can a company engage in in the Cayman Islands?

Companies incorporated in the Cayman Islands can engage in a wide range of activities, subject to compliance with local laws and obtaining appropriate licences (if required). Due to its favourable tax regime, confidentiality and flexible corporate structure, the Cayman Islands is attractive to a variety of international businesses, including:

1. Investment funds

One of the most common activities in the Cayman Islands is the management of investment funds, including hedge funds, private equity funds and real estate funds. The Cayman Islands offers a convenient regulatory environment for the registration and management of such funds.

2. Financial services

Companies may provide various financial services such as banking, insurance, asset management, and advisory services, subject to obtaining appropriate licences.

3. Holding companies

Many corporations use the Cayman Islands to set up holding companies whose purpose is to own assets, such as subsidiaries, intellectual property or real estate, to optimise their tax burden and protect assets.

4. Trade and e-commerce

Companies may engage in international trade, including exporting and importing goods, as well as providing various online services through e-commerce.

5. Technology and IT companies

Software development, IT consulting, cloud services and other technology services can also be the focus of companies in the Cayman Islands.

6. Shipping and aviation

Companies may operate shipping or aviation operations, including registering ships and aircraft under the Cayman Islands flag.

7. Counselling and legal services

Providing professional advisory and legal services to international clients.

Restrictions

It should be noted that certain activities, such as banking, insurance and investment fund management, require specific licences from the relevant Cayman Islands regulatory authorities. Companies must comply with local laws, including licensing, regulatory and anti-money laundering requirements.

When planning a company’s operations in the Cayman Islands, it is important to carefully consider all relevant requirements and seek professional advice from Regulated United Europe.

 Does a company in the Cayman Islands have to have employees?

In the Cayman Islands, there is no mandatory requirement for a company to have employees locally. Many companies, especially those registering as Exempted Companies, choose the Cayman Islands to take advantage of the jurisdiction’s benefits, such as tax efficiency and confidentiality, without the need to employ local staff.

Companies can be managed and controlled from anywhere in the world and many utilise the services of local management companies or registered agents to carry out corporate and administrative functions, including compliance and the provision of a registered office.

However, where a company’s activities require a physical presence in the Cayman Islands (for example, in the case of real estate transactions or the provision of certain types of services), it may be necessary to employ local or foreign employees. In such cases, companies must comply with local labour laws, including obtaining work permits for foreign employees, if necessary.

It is important to note that requirements may vary depending on the specific type of business and company structure, so it is recommended to consult with legal and professional advisors in the Cayman Islands for up-to-date information and certification in accordance with local laws and regulations.

 How to choose a name for a company in the Cayman Islands?

Choosing a company name in the Cayman Islands requires careful consideration and compliance with certain requirements and guidelines. Here are the main aspects to consider when choosing a name for your company:

1. Uniqueness and differences

Your company name should be unique and should not be the same or similar to the names of existing companies in the Cayman Islands to avoid confusion and legal disputes. You can check the availability of the name through your registered agent or directly with the Cayman Islands Registry Office.

2. Compliance with legislation

The name should not include words or phrases that could be misleading as to the company’s activities or contain indications of government support or patronage, if any. Words requiring a special permit or licence such as “bank”, “insurance”, “trust”, etc. are also subject to additional review and approval.

3. Incorporating a legal form

The name of the company should reflect its legal form, for example, including abbreviations such as “Ltd.” (Limited) for a limited liability company, “LP” (Limited Partnership) for a limited partnership, and so on.

4. Cultural and social sensitivity

Avoid using words or phrases that could be perceived as offensive or inappropriate in a cultural or social context.

5. Internationality and accessibility

If your company plans to operate internationally, choose a name that is easy to pronounce, easy to remember and sounds good in multiple languages.

6. Trade mark verification

Make sure that the chosen name does not infringe on existing trade marks to avoid legal problems in the future.

Once a name has been selected, it is advisable to consult with a registered agent or legal advisor in the Cayman Islands to ensure that it meets all requirements and to carry out the registration process.

Cayman Islands Business Registry

Business Register in the Cayman Islands, also known as the Registrar of Companies, the Registrar of Companies is an official list of all corporate entities (including companies, partnerships, foundations, etc.) registered in the jurisdiction. This registry provides transparency to the Cayman Islands corporate world and is a key resource for investors, business partners and regulators.

Key aspects of the business register in the Cayman Islands

1. Information availability: The registry contains basic information about each registered entity, including its name, date of registration, status (active, in the process of liquidation, etc.) and registered address. Detailed information such as director and shareholder details may be restricted in accordance with local privacy laws.
2. Online access: The Registrar General provides online access to the registry through a dedicated website where interested parties can search and obtain information on companies. A fee may be charged for access to some types of information.
3. Registry updates: The registry is updated regularly to reflect any changes in the status of registered entities, such as changes in company name, registration of new entities, or liquidation of existing entities.
4. Registration and maintenance of status: In order to maintain Cayman Islands registered company status, entities must fulfil certain requirements, including annual filing of accounts and payment of applicable government fees.
5. Business value: Being on the business register enhances the legitimacy and transparency of companies operating in or through the Cayman Islands, which contributes to the confidence of investors, banks and other business partners.

For detailed information and access to the registry, it is worth referring to the official resources of the Registrar General of the Cayman Islands or using the services of Regulated United Europe .

 How do I register an investment fund in the Cayman Islands?

Registering an investment fund in the Cayman Islands is a popular choice among international investors due to its attractive regulatory environment, political stability and lack of direct taxation. The registration process may vary depending on the type of fund, but common steps include the following:

1. Determining the type of fund

The first step is to determine the type of investment fund to be registered. The following types of funds are most commonly registered in the Cayman Islands:

• Open-ended funds (Open-ended funds) where the number of shares can vary according to investor demand (e.g. hedge funds).
• Closed-ended funds (Closed-ended funds), with a fixed number of shares that do not change after the initial offering (e.g. private investment funds).

2. Choice of legal structure

An investment fund may be registered in one of several legal forms, including:

• A limited liability company
• Partnership
• unit trust

The choice of structure depends on the specific needs of the foundation and its founders.

3. Preparation and submission of documents

In order to register, you must prepare and submit the appropriate documents, which may include:

• Statutory documents (e.g. articles of association, partnership agreement)
• An investor proposal or prospectus that describes the fund’s objectives, investment strategy, fees and expenses
• Documents confirming the appointment of the fund administrator, custodian (asset custodian), auditor and other key services

4. Registration with the Securities and Investments Commission

The Fund must be registered with the Cayman Islands Monetary Authority (CIMA) where required by law. The process involves the submission of the relevant forms and documents and the payment of a registration fee.

5. Compliance with regulatory requirements

Investment funds in the Cayman Islands must comply with regulatory requirements, including anti-money laundering (AML) and Know Your Client (KYC) regulations. This includes the development of appropriate policies and procedures.

6. Operating activities

Once the fund is registered, its operational activities begin, which include attracting investments, investing according to the established strategy and managing the fund’s assets.

7. Ongoing compliance with regulatory requirements

Investment funds must report regularly to CIMA and comply with the regulator’s requirements throughout their lifetime.

Cayman Islands investment fund promoters are strongly advised to seek professional legal advice to ensure compliance with all regulatory requirements and to optimise the registration process. Legal advisors and specialised firms will provide support at all stages of fund establishment and operation.

 How do I register a hedge fund in the Cayman Islands?

Cayman Islands hedge fund registration is a popular choice among international investors and asset managers. The registration process involves several key steps:

1. Determining the structure of the fund

The first step is to select an appropriate structure for the hedge fund, which may include a limited liability company, partnership or trust. The choice of structure depends on the investors’ objectives, the fund’s strategy and preferred tax regimes.

2. Preparation of constituent documents

Next, the founding documents, including the fund’s articles of association (or partnership agreement) and investor offer or prospectus, should be prepared and agreed. These documents should clearly describe the investment terms, governance structure, fees and charges, and investment strategies and restrictions.

3. Selection of service providers

Key service providers should be selected and appointed, including the fund administrator, custodian (asset custodian), auditor and legal advisor. These providers play an important role in ensuring effective fund administration and regulatory compliance.

4. Registration of the fund with the Securities and Investments Commission (CIMA)

Hedge funds in the Cayman Islands must be registered with the Cayman Islands Monetary Authority (CIMA). This includes filing an application for registration, articles of incorporation and other relevant information, and paying a registration fee. There are different categories of registration depending on the type of investors and the size of the fund’s assets.

5. Compliance with AML/KYC requirements

The Fund must comply with international and local anti-money laundering (AML) and customer knowledge (KYC) procedures. This includes the development and implementation of appropriate policies, procedures and controls.

6. Opening of bank accounts

Bank accounts must be opened for the fund to manage its operations and investment activities.

7. Launching and managing the fund

Once registration is complete and all requirements are met, the fund can begin raising capital and investment activities. Hedge fund management includes regular monitoring of compliance with the investment strategy, risk management and ensuring transparency for investors.

8. Continuous compliance with regulatory requirements

The Fund must continue to comply with regulatory and operational requirements, including filing annual reports with CIMA and having its financial statements audited.

The process of registering a hedge fund in the Cayman Islands can be complex and it is highly recommended that you seek the assistance of qualified legal and professional advisors specialising in financial services and regulation. These professionals will help ensure a smooth registration and fund administration process while complying with all necessary legal and regulatory requirements.