More than 60% of the world's hedge funds and 58% of all crypto funds are registered here. The Mutual Funds Act, Private Funds Act and ELP Act provide a full set of tools: from a classic equity fund to tokenized strategies.
All Cayman Islands funds fall into two broad categories: open-ended (Mutual Funds) and closed-ended (Private Funds). The former are for liquid strategies with regular subscriptions, the latter are for PE/VC/real estate.
Regulated by the Mutual Funds Act (2026 Revision). Subscription and redemption of interests take place on an ongoing basis. Categories: Registered, Administered, Master. Used for hedge funds, funds of funds and other open-ended investment structures.
Hedge fundsRegulated by the Private Funds Act (2025 Revision). A closed-ended fund with no right of redemption on demand. Used for private equity, real estate investments, infrastructure projects and secondary investments.
PE / VC / REThe primary structure for investment funds. The General Partner manages the fund, while Limited Partners participate in investments with limited liability. Tax transparency, flexibility in profit distribution, established case law.
Hedge / PE standardThe master-feeder structure is used to combine several funds within a single investment strategy. The master fund accumulates assets and makes investments, while the feeder funds attract different categories of investors.
Multi-jurisdictionA segregated portfolio company with separate portfolios, where each strategy has segregated assets and liabilities. Allows centralized management, a single auditor and a single internal control officer.
Multi-strategyFollowing the 2026 legislative changes, funds may issue tokens evidencing investors' rights. Tokenized funds falling under MFA / PFA regulation are, in certain cases, exempt from registration as a virtual asset service provider.
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 the investors.
Minimum subscription from $100,000 per investor. The most common option for hedge funds.
Has a licensed administrator. The subscription may be less than $100k. The standard for retail funds.
The master in a master/feeder structure. Registered separately, has its own license, but with simplified requirements.
Up to 15 investors, where the majority may appoint or replace the operator. Family / club-deals.
The realistic timeframe for launching a fund is 3–5 months. The longest phases: aligning the PPM with investors and onboarding the bank/administrator. We actively drive the project through every stage.
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 the REEFS portal: M&A, PPM, KYC of directors, fit & proper, certified resolutions.
A regulated Cayman fund is required to appoint key service providers (depending on the type of fund). We have direct contacts with the top 10 administrators, leading audit firms and five licensed MLRO companies.
NAV calculation, regular reporting, investor KYC, AML control. CIMA license. Partners: Apex, MUFG, IQ-EQ, Citco, Trident Trust, Maples.
Custody of fund assets. For hedge — a prime broker (Goldman, JP Morgan). For crypto — Coinbase Custody, Bitgo, Fireblocks, Anchorage.
Required for Registered Mutual Funds. Annual audit under IFRS / US GAAP. The auditor must be approved by CIMA — these may be either Big-4 firms (PwC, KPMG, EY, Deloitte with local offices in George Town) or other auditors licensed in the Caymans.
The money laundering reporting officer, their deputy and the compliance officer. All three positions must be appointed and approved by CIMA. Local providers.
Cayman lawyers to support the fund. Preparation of the PPM, Side Letters with investors, support during CIMA inspections.
One or two independent directors with CIMA Director Registration. Best practice — 3 directors (2 independent).
Legally, there is no minimum. Economically, for a Mutual Fund it makes sense with assets from $10M (this covers $80–120k of annual expenses for the administrator, auditor and directors). For a Private Fund — from $5M. For a Limited Investor Fund (up to 15 investors) — it is viable even from $1–2M.
Registration with CIMA itself, after submission via REEFS, takes 5–7 business days. The lengthy part is preparing the documents (PPM, IMA, anti-money-laundering policies), onboarding the administrator and auditor, and opening a bank account. The realistic timeframe for fully launching an operational fund is 3–5 months.
Yes, but with caveats. The administrator must support crypto subscriptions (not all do). Enhanced client verification (KYC) procedures are required for crypto wallets — blockchain analysis, confirmation of the source of crypto assets. Most administrators convert crypto subscriptions into dollars immediately upon receipt. Self-custody is generally not permitted — a third-party custodian is required.
For the fund itself — no. A crypto fund under the Mutual Fund Act/Private Funds Act may be exempt from the requirements of the VASP Act if the crypto activity is ancillary to the fund activity. But this exemption is not automatic — it is necessary to justify the applicability of the exception and to register under a special status. If, however, the fund provides asset custody services to third parties or operates as an exchange — a VASP License is required. More details in the VASP/Crypto section.
Setup costs: $35–55k (legal preparation + CIMA registration + initial administrator setup). Annual operating expenses: $80–150k for a Mutual Fund (audit + administrator + 3 directors + money laundering reporting officer (MLRO) + CIMA fees). For a Private Fund — $50–90k. At assets of $20M this gives a TER of 0.5–0.8%, which is considered market competitive.
Describe the strategy and target AUM — we will send the optimal structure broken down by stages, timeline and cost. Under NDA, with no obligations.