•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

When the Cayman Islands and the BVI agreed to implement measures equivalent to the EUSD (EU savings directive) many anticipated an outflow of fund business from those jurisdictions. Now that the details of the implementation have been published it is clear that the reverse is the case. Both Cayman and the BVI clearly have a distinct advantage over other offshore jurisdictions, which have not implemented equivalent measures, for example Bermuda and the Bahamas.

The Issue - EU and Swiss Paying Agents: feeder funds and "Nominees" EU and Swiss paying agents can include (i) a feeder fund into an offshore master fund, and (ii) nominees of individual EU residents who make investments in offshore funds (in the case of nominees on the basis that they are "receiving or securing" payments for EU resident individuals). Both types of paying agent must report or withhold if the distributions constitute "interest payments" under the applicable EUSD legislation (in particular that the underlying fund has 40%/15% invested in debt obligations) and that the offshore fund is "in scope".

The Cayman/BVI Advantage As a result of the Cayman Islands and the BVI agreeing to implement measures similar to the EUSD, certain EU jurisdictions, notably the UK and Ireland and, in addition, Switzerland have implemented legislation and/or guidance notes that acknowledge the non-UCITS equivalent of Cayman and BVI funds for the purpose of determining whether or not such fund is......................

To view our full article Click here