Structuring the boards of Cayman funds and managers — a Hong Kong perspective
When setting up a Cayman Islands investment fund and, where applicable, its Cayman Islands investment manager, consideration needs to be given to structuring the board of directors of each of these companies, not only in the context of corporate governance issues but also to ensure that they are not brought ‘onshore’ for tax purposes. The Cayman Islands Monetary Authority (CIMA) currently imposes relatively limited restrictions on the structure of the boards of open-ended investment funds, with its main requirement being that two individuals be appointed to the board of a licensed mutual fund or, in certain circumstances, a sole corporate director may be permitted (this is in addition to the requirement that such persons are fit and proper). While managers are therefore generally given wide scope when structuring the boards of their Cayman funds, in doing so they need to consider not just principles of good corporate governance but also relevant tax rules which may affect the tax residency of these offshore companies.
In the wake of international developments calling for enhanced corporate governance, CIMA is currently undertaking an industry-wide consultation process with the intention of providing a set of guidelines on the primary duties of directors of regulated mutual funds as well as setting sector-specific corporate governance standards. This is expected to supplement the current statement of guidance on corporate governance issued by CIMA, which applies to all licensed entities within the Cayman Islands. Without going into the detail of these new proposals, it is anticipated that managers will have more to consider in respect of the selection and ongoing operation of the fund’s board.
This note gives a very broad overview of some of the matters that Asian-based managers should be aware of when structuring the boards of their offshore fund entities…
If you are registered and logged in to the site, click on the link below to read the rest of the Ogier briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Ogier
News from The Lawyer
Briefings from Ogier
Of interest to trustees in relation to transfers from a non-Jersey trust to a Jersey trust.
Maternity leave, paternity leave and flexible working coming soon.