Cryptofund registration in the Cayman Islands
For more than 30 years, the Cayman Islands have been a leading offshore jurisdiction for the formation of private and mutual funds. More recently, the jurisdiction has also attracted the attention of cryptocurrency traders - ¾ of their funds are registered here.
Among the advantages - political and economic stability, lack of taxes and currency control, low fees. The Cayman Islands have adopted innovative laws to regulate companies that work with virtual assets, opening the door to this market.
Types of crypto fund registration
Both private and mutual funds can be registered to deal with cryptocurrency. Both will be considered virtual asset providers and require registration with CIMA (the Cayman Islands Monetary Authority).
Cryptocurrency mutual fund
A mutual fund is an equity portfolio designed to work with a large number of investors. The basic requirements for its registration in the Cayman Islands:
- Annual audit and submission of a report within 6 months of the end of the fund's fiscal year.
- Sending CIMA a copy of the document describing the fund's offerings. This will allow the potential investor to make an informed decision whether to buy a stake in the fund.
- Payment of the state fee.
Private cryptocurrency funds
The operation of private cryptocurrency funds is controlled by PFA law, which requires that the structure:
- be audited annually;
- file regular reports;
- keep records of transactions, asset valuations;
- monitor the movement of funds;
- conduct identification of securities.
Preferred structure of a cryptocurrency fund
Among the advantages of the Cayman Islands is flexibility, which allows you to choose the right structure. To do this, you should consult with representatives of our company before registering, answer such questions:
- The investment strategy of the crypto fund.
- Whether only investing is planned or there will also be cryptocurrency trading, blockchain startups, their combination.
- Investor liquidity.
The following legal structures can be used to register a crypto fund:
- LLC - a limited liability organization.
- Segregated Portfolio Company (SPC) - assets and liabilities are segregated and protected from the liability of other similar crypto fund portfolios.
- Exempt open-end company - suitable for managers who focus on cryptocurrency trading. It allows investors to repurchase their own investments.
- Closed-end exempt limited partnership - an option for funds focused on long-term investments in blockchain, startups, and other projects. Investors cannot redeem their investments without the manager's consent.
Mandatory registration of a crypto fund in the Cayman Islands
The VASP law states that all companies that deal in cryptocurrency must obtain a permit from CIMA. If they fail to do so, their activities will be considered a criminal offense (AML compliance).
How to register a crypto fund
To register a crypto fund with the Cayman Islands Monetary Authority, you must contact our company. An employee will study your needs, suggest a structure, and tell you what documents are needed. First of all, this is the data about the owners, managers. It is also necessary to file:
- Memorandum with basic information about the crypto fund - structure, legal address, investment objectives, restrictions, risks, fees.
- Regulatory documents (charter, partnership agreement) - the list depends on the form of registration.
- Management agreement, if the CryptoFund will be managed by a third party.
- Investment management agreement - lists duties, remuneration, responsibility, and regulates the relationship between the owner of the crypto fund and the manager.
Additionally, other documents will be needed and must be provided. You must have a registered office on the island, hire an auditor, open a bank account. For open-end funds, an external administrator is appointed.
How to quickly register a cryptocurrency fund
For a quick registration of a cryptocurrency fund in Cayman, contact IT-OFFSHORE experts.