A Practical Guide to Choosing the Right Fund Domicile

Choosing the right jurisdiction is one of the most important decisions when setting up an investment fund. Among the typical global fund domiciles are the Cayman Islands and Singapore. Both are well-established and internationally recognised, but they serve different strategic objectives and investor profiles.

This article provides an overview of the key features of each jurisdiction and highlights the main considerations to help fund managers and asset owners assess which domicile may be more suitable for their fund strategy.

As one of the world’s most established offshore fund domiciles, Cayman Island is widely used for hedge funds, private equity funds, and global investment structures. Its legal system is based on English common law, offering familiarity and certainty to international investors.

Regulatory oversight is provided by the Cayman Islands Monetary Authority (CIMA), which supervises funds in line with internationally accepted standards, including Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) requirements.

Regulatory Landscape

Cayman offers a fund-focused and efficient regulatory framework. Requirements are clear and proportionate, allowing funds to be established and operated relatively quickly while still meeting global compliance expectations.

This flexibility has made Cayman a preferred choice for managers seeking operational efficiency without excessive regulatory complexity.

Taxation

The Cayman Islands is commonly regarded as a tax-neutral jurisdiction. Funds domiciled in Cayman are not subject to local income tax, capital gains tax, or withholding tax.

This allows tax considerations to be addressed at the investor level and is particularly attractive for international and cross-border investment strategies.

Positioning

With decades of experience as a leading offshore financial centre, the Cayman Islands enjoys strong recognition among institutional investors, fund administrators, and global service providers. Its regulatory framework continues to evolve in line with international standards, supporting investors’ confidence.

Cayman-domiciled funds are commonly used by:

• Institutional investors

• High-net-worth individuals

• Family offices

• Global asset allocators

Cayman is particularly suitable for funds raising capital internationally or operating across multiple regions.

Singapore has established itself as a premier onshore fund domicile in Asia, supported by political stability, a strong legal system, and a highly respected regulatory authority. The asset management industry is overseen by the Monetary Authority of Singapore (MAS), which places strong emphasis on governance, transparency, and investor protection.

Regulatory Landscape

Singapore’s regulatory framework is comprehensive and clearly defined. Fund managers are subject to licensing or registration requirements, as well as ongoing compliance, reporting, and governance obligations.

While the regime is more structured than offshore jurisdictions, it provides clarity and regulatory certainty, making Singapore attractive for managers who prefer a well-regulated, onshore environment.

Taxation

Singapore offers a competitive and transparent tax regime for investment funds. There is no capital gains tax, and various tax exemption schemes and incentives are available to qualifying funds and fund managers.

These measures enhance Singapore’s appeal for both regional and international investment strategies.

Positioning

Singapore is consistently ranked among the world’s most trusted financial centres. Its strong regulatory discipline, rule of law, and commitment to global best practices contribute to high levels of investor confidence, particularly among institutional and sovereign investors.

Funds domiciled in Singapore often appeal to:

• Institutional and professional investors

• High-net-worth and ultra-high-net-worth individuals

• Sovereign wealth funds

• Investors with a focus on Asia-Pacific markets

Singapore is especially well suited for managers targeting regional investors or establishing a substantive presence in Asia.

Cayman Islands vs Singapore: Key Differences at a Glance

How to Decide Which Jurisdiction Is Right for Your Fund

There is no one-size-fits-all answer when choosing between Cayman and Singapore. The appropriate domicile depends on your fund’s objectives, investor profile, and long-term strategy.

In some cases, fund managers may also consider hybrid or multi-jurisdictional structures to balance investor preferences, regulatory considerations, and operational needs.

Finova Group’s Role in Implementation and Administration

While decisions around fund structure and investment strategy should be made in consultation with legal, tax, and investment advisors, the effective implementation of a fund vehicle requires careful attention to regulatory and operational details.

Finova Group supports clients at the execution stage by assisting with the incorporation of companies and VCCs in Singapore, as well as providing ongoing fund administration and corporate support services. Our role is focused on ensuring that fund vehicles are properly established, maintained, and administered in accordance with Singapore’s regulatory framework.

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