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Marketing and Sale of Securities by a Foreign Entity in the Cayman Islands

August 2015

The Cayman Islands is recognised as one of the world’s premier financial and banking centers. The Cayman Islands is home to approximately 11,000 mutual funds registered with the Cayman Islands Monetary Authority (“CIMA”), the jurisdiction’s primary regulator. These funds presently hold over US$2 trillion in assets. In addition to these mutual funds, there are a significant number of private equity and other private funds not requiring registration with CIMA; and the value of the assets held by these entities, is also substantial. In addition to the presence of a large number of funds and due to its high standard of living, tax neutrality, sophisticated infrastructure and economic and political stability, the Cayman Islands are also home to many wealthy individuals.

With such an abundance of wealth, many foreign entities seek to market and otherwise sell securities in the Cayman Islands to Cayman Islands funds and investors. There is a general prohibition in the Cayman Islands against foreign entities carrying on business without appropriate registration and/or licensing in place and as such any marketing or sale of securities to Cayman Islands investors should be taken with extreme care so as not to fall foul of Cayman Islands law.

 

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