Types of Investment Funds in the Cayman Islands

Updated on Tuesday 13th June 2017

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The Cayman Islands is the jurisdiction with the highest standard of living in the Carribean region, offering an attractive regulatory framework for the domiciliation of investment funds. Foreign businessmen may set up here a hedge fund startup and other types of vehicles which can provide a high return on investment. One of the main characteristics of the investment market in the Cayman Islands refers to the straighforward investment legislation and the numerous tax deductions and other advantages offered by the local authorities. 

 

Main types of investment vehicles in the Cayman Islands


The main types of investment funds which can be set up in the Cayman Islands are the following: 

•    exempted company
•    unit trust;
•    exempted limited partnership

Investors interested in how to start a fund in the Cayman Islands as exempted company may establish the vehicle as an open-ended or closed-ended fund. Under the regulations of the Companies Law, an open-ended vehicle may be converted into a closed-ended fund. At the same time, the Companies Law offers the opportunity to establish fund mergers
 

Mutual funds in the Cayman Islands 


According to the applicable legislation in the Cayman Islands, a mutual fund can be set up as either one of the above mentioned types of investment funds. Investors interested in the procedure on how to open an investment fund in the Cayman Islands must know that the main regulatory framework for mutual funds is the Cayman Islands Mutual Funds Law, which stipulates that such vehicles can be set up in this jurisdiction or in any other country. 

The main characteristic of a mutual fund refers to the fact that the investors can issue equity interest which can be redeemable or purchased. These types of financial instruments will allow the reduction of the investment risk associated with any investment strategy

The procedure on how to start a fund in the Cayman Islands registered as a mutual fund allows the incorporation of the following structures: 

•    licensed mutual funds;
•    administered mutual funds;
•    registered mutual funds

Our partners can provide in-depth information on the above mentioned types of mutual funds, such as the minimum capital that can be invested in these types of vehicles, or the conditions applicable to the investors. Please contact our team of affiliates in the Cayman Islands for more details on the investment funds available in this jurisdiction. 

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