This post will be especially useful for individuals interested in registering an Asia-focused fund or a financial company in the Cayman Islands.
What is so special about the Cayman Islands?
In the East Asian financial industry, the Cayman Islands are known to be one of the most attractive financial centers. Particularly for East Asian countries, the Caymans are technically a vital channel for capital flows: both inward and outward. For a long time, the Cayman Islands’ jurisdiction has been a widely desired one for registering funds focused on the Asian market.
Also, the Islands became a popular location for listed companies that are mostly related to the Hong Kong Stock Exchange. The Caymans allow an easy opening process for companies. Firms registered there happen to have leading positions on HKSE and, moreover, represent about half of the Hong Kong Stock Exchange listed companies.
Mechanisms of cooperation
East Asian countries already had the experience of cooperating in the monetary sector at the end of the 20th century. However, the cooperation mechanisms created earlier were not significantly developed because they were aimed at a certain group of projects of that time.
After the Asian crisis, it was decided to establish the Asian Bond Markets Initiative framework (ABMI). The Initiative required East Asian countries to adopt several agreements with the aim of creating deeper financial cooperation among them.
Essentially, the goal of ABMI is to avoid further crises and to make the functioning of the financial markets more efficient. For that matter, the countries signed the ASEAN+3 Agreement on Multicurrency Bond Issues (AMBIF) that is supposed to make the process of issuing bonds in the region more harmonized and simpler. As for now, the bond markets of six countries fall under the agreement. Once other regions are prepared, they are expected to join as well.
This list of benefits can be convincing for those who are thinking about registering an investment fund in the Cayman Islands:
- Tax neutrality
- Strict AML requirements
- Very low price for registration
- No reporting duty for non-regulated entities
- One-day registration
- No regulatory approval needed for the registration
- Availability of professional advisors specializing in the Cayman Islands law
- Variety of possible organizational forms (LLCs, LLPs, mutual funds, companies with divided assets.
The Cayman Islands are recognized by the financial market players as a highly desirable jurisdiction. The mentioned benefits as well as international cooperation and conformity with international regulation additionally prove that the Caymans will most probably continue being an attractive location for incorporation and investment activities in the future.
If this article inspired you to register your own company or fund in the Cayman Islands, contact our specialists. Experts in COREDO are prepared to answer your questions concerning this topic and help you make the first steps towards your goal.