Considering starting a business in the Caymans? In this article we will be looking into legal aspects of obtaining a fund license in the Cayman Islands.
Legislative Framework Governing Investment Funds in the Caymans
As per the MFA (which requires organizations to be licensed by CIMA), the overwhelming majority of open-end investment-oriented funds can qualify as mutual funds.
Closed-end funds are defined as investment-oriented entities issuing investment interests that cannot be redeemed at the discretion of the investor. They are governed by the revised version of the PFL and regulated by CIMA, which means that individuals seeking to register a closed-end fund in the Cayman Islands must apply for a license.
Having an open-end investment-oriented fund authorized in the Caymans will require knowing which legislative framework it is governed by. Having a closed-end investment-oriented fund authorized in the Caymans will require (the below information applies mostly to CIMA):
- filing a registration application following CIMA’s approval of investors’ obligations regarding the purpose of their investment;
- submitting information about the fund;
- paying a registration fee;
- complying with registration requirements;
- complying with the PFL.
Establishing a fund in the Caymans will also require its operator to contact CIMA for:
- a license authorizing conduct of business as per the Law on Investments in Securities.
Non-local fund managers are allowed to provide their services to Cayman-registered investment funds.
They are not required to apply for a license or seek registration with CIMA, provided that they do not decide to be residents of the Caymans.
Individuals operating a mutual fund are required to comply with registration- and licensing-related requirements. They must also have their their fund registered with CIMA.
Legal Support for Businesses Operating in the Caymans
Considering opening a fund in the Cayman Islands? Seeking to get more information on registering investment funds in the Caymans? IQ Decision UK can provide you with all the necessary information on conducting business in the Caymans. Get in touch with us and arrange for individual consultation on regulating investment funds in the Cayman Islands. With us, doing business in the Cayman Islands will be a sheer pleasure.