Offshore Fund Cayman Islands

Often our hedge fund or private equity fund clients want to accept investment from non U.S. or U.S. tax exempt investors. When this is the case, Randall & Associates structures offshore fund vehicles that can operate on their own or in coordination with a standard fund formed in the U.S. We highly recommend using the Cayman Islands for these types of fund vehicles as they have investor friendly legal system and advantageous tax benefits for non U.S. and U.S. tax exempt investors.

The Cayman Islands offers funds under several “categories” but the most common are the following:

  • Category 4(3) funds: Require minimum initial investment of at least $100,000 by all investors (with and exception for investors that are “connected” to the investment manager)

  • Category 4(4) funds: Require fewer than 15 investors and are an open ended fund which is exempt from CIMA registration.

Offshore Fund Formation

Randall & Associates is highly experienced in forming offshore funds in the Cayman Islands. We work closely with local registration offices to make sure the fund is created according to the rules and regulations of the Cayman Islands. Our Cayman Islands fund formation services include:

  • Drafting Memorandum of Association and Articles of Association for the fund

  • Establishing the fund entity with the Registrar of Companies

  • Obtaining Registered Agent and Registered Office for the fund entity

  • Cayman Islands Monetary Authority application and certification of fund documents

  • Drafting fund operational documents like appointment of directors, investment management agreement and corporate minutes.

  • Drafting the Offering Memorandum which provides the required disclosures and risk factors involved in the investment.

  • Obtaining a Cayman bank account for the investment monies

Creating a hedge fund, crypto currency fund, or private equity fund offshore can be highly beneficial to fund managers. A Cayman Islands fund opens the doors to international and U.S. tax exempt investors. Great care must be taken to have adequate legal counsel so that the structure and registrations comply with the local law and that liability for the fund managers is limited as much as possible.

Randall & Associates offers free consultations and reviews for clients wanting to set up an offshore fund or that may have incorrectly started a fund and needs help getting back into compliance.