On 12 April 2016, the Alternative Investment Management Association ("AIMA")1 published a paper entitled, Transparent, Sophisticated, Tax Neutral: The Truth about Offshore Funds. We endorse its message and encourage you to read it.
The headline points in the AIMA paper are:
(a) The offshore jurisdiction with the largest number of alternative investment funds is the Cayman Islands, which is internationally compliant, committed to information exchange, well-regulated, cooperative and transparent;
(b) Offshore alternative investment funds are good for investors, including pension funds, sovereign wealth funds, not-for-profit organisations and charities – and their stakeholders;
(c) Offshore alternative investment funds are tax neutral, eliminating duplicative layers of taxes which unfairly diminish stakeholder returns. They do not affect onshore tax revenues as investors pay their taxes in their home jurisdictions;
(d) Offshore alternative investment funds are transparent, being at the cutting edge of regulatory and tax compliance and information exchange, including FATCA and CRS;
(e) Offshore alternative investment funds are flexible, cost effective access to more fund managers and more sophisticated and diversified investment strategies;
(f) Offshore alternative investment funds act to pool global capital, bringing worldwide investors together; and
(g) Offshore alternative investment funds are good for the global economy, providing liquidity to markets, providing alternative sources of financing to developing and developed economies, creating significant jobs and generating tax revenues in onshore financial centres.
If your clients or stakeholders ask "Why are we in the Cayman Islands?", the AIMA paper should present an ideal starting point.
1 AIMA is an onshore-based global funds industry organisation with a worldwide membership and access to on-the-ground expertise in key onshore and offshore jurisdictions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.