In an article which appeared in the Legal Week edition of 13 October, 2005, I highlighted the Cayman Islands’ position as the leading domicile for offshore hedge funds. As it turned out, 2005 was another record year for the Cayman hedge fund industry, with some 1,700 new funds being registered, compared with 1,500 in 2004.
At the end of November 2005, the Cayman Islands Monetary Authority (CIMA) announced the 10,000th fund to be approved for registration since the passage of the Mutual Funds Law of the Cayman Islands in 1993. Somewhat ironically (ironic because Bermuda and the Bahamas had initially seen the European Union Savings Tax Directive as an opportunity to develop their investment fund industry at the expense of Cayman), the 10,000th fund was an example of a new source of investment funds business for Cayman; namely, funds transferring from Bermuda and the Bahamas to take advantage of exemptions that Cayman has under the European Union Savings Tax Directive.
