BLOG SERIES: Doing business in the Cayman Islands and what lies ahead
Whilst achieving its commercial success, the Cayman Islands has maintained a high level of integrity. It is recognised by the Financial Action Task Force as a leader within the Caribbean region in the fight against money laundering.
The Cayman Islands is recognised internationally for its efforts to adhere to international regulatory standards and plays a leadership role in the offshore arena on international regulatory issues. The jurisdiction is well known to have in place a regulatory regime which surpasses many of the world’s top international financial centres in the area of anti-money laundering.
Private and institutional investors have long been are attracted to the Cayman Islands, with global investors being increasingly engaged in a flight to quality — relocating their resources based on sophisticated assessments of which financial centers offer the best combination of:
- efficiency and neutrality
- a global network and diverse industry;
- an experienced legal infrastructure and neutral tax environment;
- high regulatory standards and respect for appropriate privacy;
- world class professionals and credibility;
The Cayman Islands Tax Neutral regime is often times misunderstood. The Cayman Islands offer a globally responsible tax model that is simple and transparent and efficiently supports the global free flow of investment capital and financing without posing tax harm to other countries’ tax bases.
Cayman pursues easing of the double tax burden through a policy of Tax Neutrality, which means investors in Cayman are still subject to their home jurisdiction’s tax requirements, but the Cayman Islands does not add an additional layer of taxation on to the proceeds from their investments.
The Cayman Islands is a transparent, cooperative jurisdiction that already meets or exceeds the full range of globally accepted standards for transparency and cross-border cooperation with law enforcement and tax authorities. The OECD’s Global Forum in 2017 assessed Cayman to be “largely compliant” with the international standard for transparency and exchange of information, the same rating given Germany, Canada and Australia.
What lies ahead
In January 2020, the Cayman Islands Government launched its much-anticipated response on EU and international recommendations, with a focus on new sector specific requirements for the registrations of unregulated investment funds.
On February 7, 2020, The Cayman Islands Government published the Cayman Islands Private Funds Law 2020 and Mutual Funds (Amendment) Law, 2020. These respective laws have established a regulatory framework for alternative investment funds meeting the definition of “private funds” and enhance the regulatory supervisory framework for open ended mutual funds.
With a pending registration deadline of August 7, 2020, the most significant changes centered around the registration with the Cayman Islands Monetary Authority for both private funds falling under the Cayman Islands Private Funds Law 2020 and the removal of the exemption for funds with fifteen of fewer investors under the Mutual Funds (Amendment) Law 2020.
Our Moore Cayman team has extensive experience to provide you and your clients with guidance and support through this registration process. We are committed to working with you to ensure that your funds meet these new requirements in a timely manner.
Moore Cayman is an independent firm of Moore Global network. Launched in 2005, joining the Moore Global network in 2016, we are a specialist provider of audit services to firms and funds within the financial services industry.
Our audit clients comprise over 250 investment funds, including digital asset portfolios, across various jurisdictions, both offshore (in the Cayman Islands and British Virgin Islands) and Delaware, Hong Kong, the UK and other offshore jurisdictions.
We work seamlessly with Moore Global firms across the world to provide an expert and efficient audit service tailored to our clients.
Get in touch today.
FCCA, MBA, CPA– Partner (Cayman Islands)
D:+1 (345) 936 9904