Jersey: Bucking Historic Trends - Jersey, Cayman & BVI Funds

Last Updated: 3 February 2009
Article by Adrian Odell

Historic trends are frequently considered when comparing offshore jurisdictions, including for the purpose of choosing a fund domicile. Jersey, Cayman and BVI provide no exception. Theoretically, concentrations of offshore funds may be defined with reference to the status of the promoter, target market of a fund in relation to investors and investments, and investment strategy. Typical examples would include established jurisdictions which are commonly associated with funds versus start-up fund promoters, retail versus private investors, and traditional versus alternative investment strategies. In practice, these may translate to statements concerning the jurisdiction of choice for retail funds, hedge funds, private equity funds, and so on. This article outlines the difficulty with identifying historic trends, and the limited role which they should play in choosing a fund domicile, with a focus on Jersey, Cayman and BVI, given the current level playing field in the offshore legal and regulatory environment, including the standard of fund service providers.

Evidence Of Trends

Identifying and comparing historic trends in the context of offshore funds is not easy. Statistics do not exist to verify perceived trends as between jurisdictions (although certain jurisdictions do publish useful statistics in relation to their own fund industry). Meaningful comparison between jurisdictions requires a uniform set of classificatory criteria, for instance in relation to fund promoters, target markets and investment strategies. However, jurisdictions typically approach these matters differently. Definitions are inconsistent (comparing the number of funds, or types of funds, as between jurisdictions is unhelpful if they apply different defining criteria), and regulatory requirements also differ (comparing the number of regulated funds as between jurisdictions is unhelpful if they apply different regulatory thresholds). As a consequence, offshore jurisdictions have failed to date to successfully collaborate in providing comparable statistics to confirm perceived trends.

Choice Of Jurisdiction

Apart from the absence of accurate statistics to support perceived trends, there are more substantive issues to consider in choosing a jurisdiction. By way of background, promoters of funds choose a fund domicile based on an array of factors. Significant slots at conferences, published articles and debates analyse the factors involved in the choice. However, only a couple of factors truly qualify as pre-requisites for an appropriate fund domicile, while the remainder relate to preferences, matters of convenience and the like. Two of the most important pre-requisites may be as follows:

  1. an appropriate legal, regulatory and tax environment; and
  2. responsive and well qualified service providers.

Jurisdictional differences in costs are usually insignificant in the context of overall fund start-up costs and have become less of an issue, along with timing, in the key offshore jurisdictions. Assuming a level playing field in terms of (i) and (ii) above, it is submitted that, irrespective of the speed at which different jurisdictions evolved, the value of any perceived historic trend should be disregarded in the future choice of fund domicile. Instead, professional advice should be sought to assist in focussing on the factors that really count.

Legal Issues

Company, partnership and trust laws are essential to the effective establishment and operation of a fund structure. Although each jurisdiction has evolved at its own pace, Jersey, Cayman and BVI have now all developed a comprehensive legislative framework capable of accommodating a wide range of funds, and providing an appropriate tax efficient legal structure for almost any type of offshore investment fund. Although there are differences in the technical provisions of the laws, competitive spirit has resulted in the development of a set of laws which may be regarded as equivalent to one another in their ability to facilitate fund products. Critical differences between jurisdictions have become few and far between. However, jurisdictional idiosyncrasies do exist and can be used to the advantage of fund structures with appropriate professional advice.

Regulatory Issues

Regulatory treatment of funds has also evolved. Approaches are different in the offshore regulatory environment, certain jurisdictions providing for a few broad categories of fund regulation and others providing a wide array of regulatory categories with each aimed at a specific market segment. However, offshore fund regulation has generally evolved in line with the onshore move to provide for different levels of regulation dependent on the type of investor who will invest in a fund, primarily distinguishing between retail investors on the one hand, and sophisticated or high net worth investors on the other hand. The latter generally regarded as requiring a lower level of regulatory protection. Each of Jersey, Cayman and BVI now has an appropriate and carefully thought out regulatory category to suit any fund. Again, professional advice can assist in choosing the best environment for a particular fund.

Service Providers

An appropriate legal, regulatory and tax environment should be necessary, but on its own insufficient, to attract funds to a given jurisdiction. Professional service providers are required to implement and operate the offshore component of a fund structure. Due to geographic separation from clients, responsiveness and reliability of service providers is equally important. The level of service required will be dependent on fund structure, and will not necessarily be the same as between funds. Although Jersey, Cayman and BVI may have evolved at a different rate to one another, in particular becoming specialised at different times in niche markets, today they each provide a broad spectrum of responsive and appropriately qualified fund service providers. Arguably, all things being equal, choice of service provider, including their ability to service a fund business consistently and at the same or a higher level as it grows, should be the most important driver in choosing one jurisdiction over another.

The Future

Given a level playing field with reference to legal, regulatory and tax considerations, and comparable service providers, perceived trends in choice of fund domicile should be regarded as having historic significance only. This approach is certainly prudent in the case of choosing between Jersey, Cayman and BVI, and further supported by the formation of multi-jurisdictional firms providing consistent legal, administration and other fund services. Cumulatively, these factors eliminate the risk in choosing one jurisdiction over the other for any fund product, including retail funds, hedge funds and private equity funds.

Based on the above, professional advisors should be encouraged to choose a fund domicile (which may include Jersey, Cayman and BVI) with a special focus on the factors that really count.

This article first appeared in the winter 2008/09 issue of Appleby Jersey's Finance newsletter.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions