Monthly Archives: February 2016

Cayman LLCs – a vehicle to unlock foreign tax reclaim entitlements

In this guest post, Brian Sapadin, Executive Director of GlobeTax, discusses the benefits of tax reclamation and the opportunities presented by the new Cayman LLC draft legislation.

With the highly anticipated Cayman LLC law finally being published in draft, once unobtainable foreign tax reclaim entitlements are expected shortly to be in play for eligible investors whose Cayman fund undertakes a conversion to the new structure (or, in the case of a new launch, initially structures as a Cayman LLC). Most U.S. tax-exempts invest through offshore feeders, traditionally a Cayman limited company (Cayman LTD), to avoid Unrelated Business Income Tax (UBIT) which can be assessed to U.S. resident tax-exempt investors for gains made on leverage, including traditional margin or shorting strategies. Unfortunately, investors in such vehicles do not have access to double taxation treaty benefits, since the Cayman vehicle serves as a corporate blocker and Cayman itself is not party to bilateral tax treaties.

In a Cayman LLC — a transparent “look-through” vehicle — U.S. tax-exempts (and the fund manager) should soon be able to reap the benefits of tax treaties, for eligible markets other than the U.S., while still being shielded from UBIT.

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Hedgeweek extols the virtues of the BVI to start-up managers

I had the pleasure of being interviewed by Hedgeweek recently regarding the success of the BVI’s two new funds products focused at the start-up manager; the incubator and approved funds.

As the article makes clear, the BVI now has the complete package for emerging managers, and is, understandably, now being given very serious consideration by new players to the market.

You can read the article in full here.

As always, do let us know if you have any thoughts.

Iran’s Implementation Day Arrives and Harneys is in the Thick of it

Harneys advises on first EU-approved, Iran-oriented alternative investment fund

It’s not every day that you get the chance to announce that you’ve set-up the first hedge fund, but, for the second time running (the first being the establishment of the first BVI hedge fund*), Harneys have done it, with the establishment of the very first Cypriot hedge fund, Turquoise Variable Capital Investment Fund Plc. But wait – this time, it’s a double first – as Turquoise is also the first EU-approved Iran-oriented alternative investment fund. Taa daaaaaa!

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