How to Start a Hedge Fund in the Cayman Islands
Updated on Tuesday 12th December 2017
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The Cayman Islands can represent the perfect location for the investors who are interested in hedge fund startups. At the moment, the Cayman Islands is the leading jurisdiction for offshore funds participating in banking investments. One of the main advantages for setting up a hedge fund in the Cayman Islands refer to the advantageous taxation regime and the legal options related to the legal entities that can be incorporated to represent the respective investment vehicle.
Legal framework for hedge funds in the Cayman Islands
The legislative framework for investors interested in how to start a hedge fund or any other investment fund is the Mutual Funds Law. Its implementation falls under the supervision of the Cayman Islands Monetary Authority (CIMA), the main regulatory body for investment vehicles registered here.
The following video offers a short presentation on how to start a hedge fund in the Cayman Islands:
The hedge funds in Cayman Islands can be registered under one of the following legal entities:
• unit trust;
As a general rule, most of the hedge fund startups in Cayman Islands are registered as open-ended alternative investment funds, which refer to the fact that the investors will be allowed to redeem their investment. Investors may find out more details on the advantages of open-ended and closed-ended structures from our magazine.
Register an open-ended hedge fund in the Cayman Islands
Businessmen interested in the procedure on how to start a hedge fund in the Cayman Islands should know that the vehicle must have maximum 15 investors, following the regulations prescribed in the Section 4 (4) of the Mutual Funds Law.
In this particular case, the investment vehicle is not required to register with the CIMA. At the same time, the fund in not legally required to submit its audited documents.
However, investment funds that fall under the regulations available at the Section 4 (3) will be required to register with CIMA. At the same time, investors will need to draw the company’s statutory documents and to set up an initial investment capital established at $100,000.
Businessmen can receive further information on other requirements for starting a hedge fund in this country from our team of affiliates in the Cayman Islands. Investors searching for a suitable jurisdiction for hedge fund startup are invited to visit our online magazine for further information related to this topic, as our editors will provide on a regular basis new information referring to investment funds.