CAYMAN ISLANDS Law and Practice Contributed by: Christie Walton, Patrick Rosenfeld and Philip Dickinson, Maples Group
IGA and CRS to financial institutions structured in the Cayman Islands. All Cayman Islands financial institutions are required to comply with the registration, due dili - gence and reporting requirements of the AEOI Regulations. From an investor’s perspective, while the Cay - man Islands adds no additional tax layer to the structuring of their global financial transactions, investee entities as well as investors are still sub- ject to their home jurisdictions’ relevant taxes and are responsible for complying with such obligations. As noted above, the Cayman Islands has adopted globally accepted standards for transparency and cross-border co-operation with foreign tax authorities and law enforcement agencies, and it automatically exchanges infor - mation with more than 100 worldwide revenue authorities annually, pursuant to the Cayman/US IGA and CRS (among other annual automatic exchange of information regimes). The majority of investment funds established in the Cayman Islands are private non-retail funds. Indeed, a Cayman Islands company that is not listed on the Cayman Islands Stock Exchange is prohibited from making any invitation to the pub - lic in the Cayman Islands to subscribe for any of its securities, and exempted limited partnerships are prohibited from undertaking business with the “public in the Cayman Islands” other than so far as may be necessary for the carrying on of the business of the partnership exterior to the Cayman Islands. 3. Retail Funds 3.1 Fund Formation 3.1.1 Fund Structures
For these purposes, “public in the Cayman Islands” does not include the following: • any exempted or ordinary non-resident com - pany registered under the Cayman Islands Companies Act (As Revised); • a foreign company registered pursuant to Part IX of the Companies Act; • a foreign limited partnership registered under Section 42 of the Cayman Islands Exempted Limited Partnership Act (As Revised); • any company acting as general partner of a partnership registered under the Exempted Limited Partnership Act; or • any director or officer of the same acting in such capacity or the trustee of any trust regis - tered or capable of registration as an exempt - ed trust under the Cayman Islands Trusts Act (As Revised) acting in such capacity. Investors in an exempted trust registered under Part VI of the Trusts Act must not and must not be likely to include any person who is resident or domiciled in the Cayman Islands (other than exempted and ordinary non-resident Cayman Islands companies or the object of a charitable trust or power). Subject to the above restrictions, certain cat - egories of regulated open-ended mutual funds may be established without a statutory minimum investment requirement and therefore could be established as retail funds, although they are not common in the Cayman Islands. There are four types of regulated open-ended “mutual funds” under the Mutual Funds Act. • The “licensed mutual fund” – a fund may obtain a licence from CIMA if CIMA considers that each promoter of the fund is of sound reputation, that the administration of the fund
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