Industry Professionals serving as non-executive directors to Alternative Funds

Industry Professionals serving as non-executive directors to Alternative Funds

A way to offer more substance in Cayman?

Stella Murrell

Q&A on Cayman Enterprise City

With the debate over governance vs substance set to run and run, hedge funds may want to consider the opportunities offered by Cayman Enterprise City.  This venture is designed to streamline the process for international businesses setting up operations in the Cayman Islands.

To give a better understanding we conducted a Q&A with Charles Kirkconnell, CEO, Cayman Enterprise City. See below for full interview.


  • What is Cayman Enterprise City and why is it unique?

The Cayman Islands Government recently set the jurisdiction apart from other favourable tax jurisdictions with the development of Cayman Enterprise City (“CEC”), an award-winning knowledge and technology focused special economic zone. CEC enables international businesses to easily and cost-effectively establish a genuine staffed physical presence in the Cayman Islands, creating an opportunity for such businesses to efficiently generate active business income in an offshore jurisdiction. CEC is unique because it’s the first zone of its kind in a tax-neutral jurisdiction and is strategically and conveniently located only one hour from Miami, three hours from NYC and operates on Eastern Standard Time.


  • What are the advantages for and how can Hedge Funds utilise Cayman Enterprise City?

International companies establishing in CEC benefit from Cayman’s general jurisdictional advantages (no corporate tax, no capital gains tax, no payroll tax and no income tax) as well as a series of attractive concessions granted by the Cayman Islands Government.  These include an automatic access to 100% foreign ownership, fast-track 3-4 week set up of operations, zero import duties for business related items, five year work/residency visas for any staff from anywhere in the world granted within five working days and significantly reduced business licencing and work visa fees.


  • What sorts of Trading or Investing companies are currently domiciled in Enterprise City?

Businesses focused on trading in commodities and derivatives (whether physically or electronically) that do not require to be licenced by the Cayman Islands Monetary Authority (“CIMA”) may be licenced by the Special Economic Zones Authority (“SEZA”). This means businesses engaged in financial service activities other than those conducted by monetary institutions may be licenced, including those businesses engaged in (a) activities relating directly or indirectly to the trading of commodities, derivatives, futures and options, howsoever and wheresoever settled, (b) commodities fund management, (c) proprietary trading primarily in commodities and/or derivative products for own account and/or (d) facilitating and supporting such businesses. Insurance and pension funding activities are excluded.

Further, businesses engaged in activities auxiliary to commodity and/or derivative focused financial service activities (except insurance and pension funding) may be licenced by SEZA. Businesses engaged in the furnishing of physical or electronic marketplaces for the purpose of facilitating the buying and selling of stocks, stock options, bonds or commodity contracts may therefore be licenced.


  • What is the process to establish?  Does a trading company or hedge fund need any other licences (SIBL exclusion for instance)?

The establishment process is fast and simple. Once a business has determined the number of people it wishes to place in Cayman and the amount of physical office space it needs, CEC provides a Licence Agreement package to suit its needs. The business then completes the required application forms through CEC’s online portal and provides the original application forms and some basic due diligence documentation to CEC. CEC then submits the original application forms to SEZA and within five working days receives confirmation of the in-principle approval of the issue of a Trade Certificate for the business. The business’ Cayman counsel or corporate services provider then sets up a Special Economic Zone Company (SEZCo) for the business and provides CEC with copies of the relevant incorporation documents. The documents are then submitted to SEZA and the Trade Certificate is issued.

The businesses may then apply for the grant of work visas for any foreign employees they wish to place in their Cayman office, which applications are granted within five working days.

Please note that CEC assists with the making of each of these applications.

Finally, a business licenced into the Cayman Commodities & Derivatives Park would need to provide a confirmation to SEZA of the application of Cayman’s Security and Investment Business Law to the business. Only businesses that qualify as “Excluded Persons” under that law or that are not engaged in “securities investment business” within the meaning of that law are entitled to be licenced into the Cayman Commodities & Derivatives Park.


  • How many staff can be brought into Cayman Enterprise City?

As many as a business wants or needs. There are no restrictions on this and once established, a business can add staff at any time without restrictions.


  • What infrastructure do you have to ensure trading companies will be able to operate seamlessly (IT, Internet etc.)?

CEC has partnered with local carriers (Logic & LIME) who work with “best of breed” international carriers to provide Multi-Protocol Link Service (MPLS) and International Private Leased Circuit (IPLC) connectivity to anywhere in the world,  whether the requirement is a dedicated connection from the Cayman Islands to a single Point of Presence (POP) or a private global network. One of our preferred partners has developed a product specifically aimed at our clientele who are traders: PiP – Predictable IP is a product based on a world-wide MPLS network providing back-haul to a Global network of Internet POPs, thereby creating a very “predictable” experience, with latency values approaching MPLS quality.

CEC’s datatcentre services provider partner provides clients with colocation, managed hosting and business continuity solutions from their world-class data and disaster recovery centres located on Grand Cayman and Cayman Brac. With redundant offshore datacentres on two different islands located nearly 100 miles apart, this services provider is able to provide a complete solution for both production and backup operations, all within the Cayman Islands legal jurisdiction. Each centre is supported by different power and water companies, communications infrastructure, international airport and public safety support system. This resilient infrastructure establishes a level of redundancy and uptime unmatched in the region.

CEC has engaged best-in-class vendors for our ICT infrastructure: Panduit, Cisco, HP, APC & Mitel are but a few of world Technology leaders who are working closely with our development team, ensuring world class infrastructure design and build-out for CEC clients.