Mutual Fund Services

Various Corporate Structures

Most funds organised as corporations will register as Cayman Islands exempted companies. An exempted company obtains an undertaking from the Government that if taxes are ever introduced into the Cayman Islands, the company will not be taxed for a period of up to thirty years from the date of the undertaking.

An exempted company is required to keep a register of members, although it does not have to file an annual return of members with the Registrar of Companies. The names of the investors remain confidential, as the exempted company is not required to open its register to public inspection.

A unit trust is not a separate legal entity but a relationship of parties, and is usually constituted by a trust deed. The underlying investments will be vested in the trustees, who are required to be licenced under the Banks & Trust Companies Law. The trust deed will declare that the beneficial ownership is to be represented by units.

As with the exempted company, there is no statutory right to inspect the register of unitholders, and the trustee is required to keep such information confidential.

A limited partnership is an association of general partners, who have unlimited liability for the partnership debts, and limited partners, who have limited liability. The constitution of a limited partnership will be provided for within a partnership agreement. For the purposes of a mutual fund, this agreement will generally provide for the minimum investment required from each partner, generally payable at closing or in installments.