Example of Material Included in a Cayman-Based Fund for Tax-Exempt US-Investors
The material for this section of the book has been supplied by Ingrid Pierce, partner head of the hedge fund practice at the Cayman Island–based law firm Walkers.
Part 1: Establishing an Offshore Fund Domiciled in the Cayman Islands1
The choice of fund structure will be driven by the target investor base, investment management requirements, and tax structuring concerns.
Funds may be established as exempted companies, exempted limited partnerships, or exempted trusts.
Exempted company An exempted company must have a registered office in the Cayman Islands and keep registers of its directors and any security interests granted by the company at its registered office. It must also maintain a register of shareholders (although this need not be maintained in the Cayman Islands). Shareholders of an exempted company incorporated with limited liability will have limited liability, usually limited to the amount, if any, unpaid on their shares.
Segregated portfolio company An exempted company may be registered as an exempted segregated portfolio company (“SPC”). Segregated portfolios of an SPC may be established with the benefit of statutory segregation of their respective assets and liabilities.
Exempted limited partnership An exempted limited partnership must have at least one limited partner and at least one general partner. At least one general partner must be a resident in the Cayman ...