News about global regulations is buzzing—offshore spots like the Cayman Islands or Bermuda are still hot for FoFs. For someone just starting, what makes one jurisdiction better than another for a feeder fund? Discuss the vibe—ease of setup, investor trust, or startup costs.
Looking for an offshore fund hub? Cayman Islands is a top pick—no taxes, no currency limits, and a solid regulator (CIMA) that builds investor trust without red tape. List on the Cayman Stock Exchange to stand out when pitching. Costs add up: ~$5,000/year per portfolio for CIMA fees, ~$25,000 for legal setup, and ~$35,000 for audits (Big Four firms are common). Expect ~$17,000 for office and lawyers, ~$900/month minimum for accounting (0.5% of AUM), ~$4,500/month for AML/KYC officers, and ~$2,000/month for custodians. Banking takes 6-12 months, with deposits from $5,000 to $5 million. Want faster? Try chainBLX’s “fund as a service” for ~$25,000 setup and $25,000-$60,000 yearly (audits included), cutting banking delays by up to a year. Why Cayman over BVI? Rules suit smaller funds better. Which hub are you eyeing?
Structuring your Cayman fund? Options abound: 1) Exempted companies—versatile for mutual funds, with single or multi-class shares (great for FoFs). 2) Exempted limited partnerships—private fund favorites, allocating profits per investor’s capital. 3) Unit trusts—suits redeemable units, with 50-year tax exemptions if registered as exempted trusts. Segregated portfolio companies (SPCs) shine for separating assets across strategies, protecting each pool. Master-feeder structures are gold for blending onshore/offshore investors. Legal setup runs $25K-$30K, so choose based on your LP base and goals. Tip: SPCs cost more but save headaches for multi-strategy funds. Which structure’s calling you? What’s driving your pick?
It is important to consider your Jurisdiction, nationality, and/or immigration status. You have to remember that Cayman Island as all the other off shore and tax neutral jurisdiction doesn’t mean you will not be taxed at your home country. International agreements are still in place. No fund will help in tax evasion. Every one has to speak with a legal council and CPA in their own jurisdiction.