More than 60% of the world's hedge funds and 58% of all crypto funds are registered here. Mutual Funds Act, Private Funds Act and ELP Act provide a full range of tools: from a classic equity fund to tokenized strategies.
All funds in the Cayman Islands are divided into two large categories: open-ended (Mutual Funds) and closed-ended (Private Funds). The first ones are for liquid strategies with regular subscriptions, the second ones are for PE/VC/real estate.
Regulated by the Mutual Funds Act (2025 Revision). Subscription and redemption are permanent. Categories: Registered, Administered, Master, Limited Investor. Hedge funds, FoF, liquid strategies.
Hedge fundsRegulated by the Private Funds Act (2025 Revision). Closed-ended, without the right of redemption upon request. Private equity, venture capital, real estate, infrastructure, secondaries.
PE/VC/REMain stock structure. General Partner manages, Limited Partners invest without responsibility. Tax transparency, flexibility of distributions, case law.
Standard hedge/PEMaster fund (Cayman) + Feeder funds (Cayman + Delaware/Luxembourg). US tax-exempt and non-US investors are pooled separately - a single investment strategy in the master fund.
Multi-jurisdictionSegregated Portfolio Company, where each portfolio is a separate strategy with isolated assets and liabilities. One MLRO, one auditor, up to 30+ cells in one shell.
Multi-strategyAccording to legislative update 2026, funds can issue tokens representing fund interests. Tokenized funds under MFA / PFA are exempt from VASP registration (if custody is incidental).
Web3-nativeThe Mutual Funds Act (2025) divides open-ended funds into four registration categories. Compliance requirements, minimum deposit and cost depend on the size of the fund and the nature of investors.
Minimum subscription from $100,000 per investor. The most common option for hedge funds.
Has a licensed administrator. Subscription may be less than $100k. Standard for retail funds.
Master in master/feeder structure. It is registered separately, has its own license, but simplified requirements.
Up to 15 investors, while the majority can assign or change operator. Family/club-deals.
The realistic time frame for launching a fund is 3–5 months. The longest phases: coordination of PPM with investors and onboarding of the bank/administrator. We actively lead the project through all stages.
Strategy analysis, choice of form (ELP / SPC / Foundation), feeder jurisdiction, tax transparency.
PPM (Private Placement Memorandum), Subscription Documents, Investment Management Agreement, NAV Policy.
Selection and onboarding of administrator, custodian, auditor (Big-4), MLRO/DMLRO/AMLCO. Banking introduction.
Submission via REEFS-portal: M&A, PPM, KYC of directors, fit & proper, certified resolutions.
A regulated fund in Cayman is required to appoint a minimum of four service providers. We have direct contacts with the top 10 administrators, all Big 4 and five licensed MLRO firms.
NAV calculations, regular reporting, KYC of investors, AML. CIMA license. Partners: Apex, MUFG, IQ-EQ, Citco, Trident Trust, Maples.
Custody of fund assets. For hedge - prime broker (Goldman, JP Morgan). For crypto - Coinbase Custody, Bitgo, Fireblocks, Anchorage.
Required for Registered Mutual Funds. Annual audit according to IFRS / US GAAP. PwC, KPMG, EY, Deloitte have local offices in George Town.
Money Laundering Reporting Officer, deputy and compliance officer. All three positions must be appointed and approved by CIMA. Local providers.
Cayman lawyers to support the fund. Preparation of PPM, Side Letters with investors, support of CIMA inspections.
One or two independent directors with CIMA Director Registration. Best practice - 3 directors (2 independent).
Legally, there is no minimum. Economically - for Mutual Fund it makes sense with an AUM of $10M (compensates for $80-120k in annual expenses for administrator, audit, directors). For a Private Fund - from $5M, since there is no Big-4 audit requirement. For Limited Investor Fund (≤15 LP) - even $1-2M is viable.
Registration with CIMA itself after submission through REEFS takes 5–7 working days. The long part is preparing documents (PPM, IMA, AML policies), onboarding the administrator and auditor, opening a bank account. A realistic time frame for launching a fully operational fund is 3–5 months.
Yes, but with reservations. The administrator must support crypto subscriptions (not all). We need extended KYC procedures for crypto wallets (chain analysis, source of crypto wealth). Most adms convert crypto subscriptions into USD immediately upon receipt. Self-custody is usually not allowed - a third-party custodian is required.
Not for the fund itself - a crypto fund under MFA/PFA is automatically exempt from the VASP Act if the crypto activity is incidental to the fund activity. But if the fund provides custody services to third parties or operates as an exchange, a VASP License Phase 2 is required. More details in the VASP/Crypto section.
Setup costs: $35–55k (legal preparation + CIMA + first administrator setup). Annual operating: $80–150k for Mutual Fund (audit Big-4 + administrator + 3 directors + MLRO + CIMA fees). Private Fund – $50–90k (no audit). At $20M AUM this gives a TER of 0.5–0.8%, which is considered market competitive.
Describe the strategy and target AUM - we will send you the optimal structure broken down by stages, timing and cost. Under NDA, without obligations.