This guide provides a high level summary of the main obligations for Cayman Islands investment funds under Cayman Islands automatic exchange of information (AEOI) legislation.
Background and legislative framework
Over recent years governments around the world have agreed international standards for the automatic sharing of financial account information between global fiscal authorities, with the aim of reducing tax evasion.
As part of its commitment to international transparency standards, the Cayman Islands Government is a signatory to:
A Model 1B intergovernmental agreement with the United States (US IGA) which provides the framework for the implementation of the US Foreign Account Tax Compliance Act (FATCA) in the Cayman Islands
The OECD sponsored Multilateral Competent Authority Agreement and certain bilateral agreements or tax treaties regarding the common reporting standard on automatic exchange of information (CRS, together with the US IGA, AEOI Agreements)
As Cayman Islands entities are not directly subject to the AEOI Agreements, the Cayman Islands has introduced legislation to implement the AEOI Agreements under the Tax Information Authority Act (TIA Act) including the Tax Information Authority (International Tax Compliance) (United States of America) Regulations (FATCA Regulations) and the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) Regulations, as amended (CRS Regulations), together AEOI Legislation). Definitions used in this guide are as set out in the AEOI Legislation unless otherwise indicated.
The Department of International Tax Co-operation (DITC) is the Cayman Islands government department responsible for tax affairs and the Tax Information Authority (TIA), created by the TIA Act, is the Cayman Islands competent authority for tax co-operation and is housed within the DITC. The DITC has issued guidance notes (Guidance Notes) on the AEOI Legislation, which can be found here and here, which provide details of the notification, reporting and ongoing obligations that apply, as well as a useful reminder of the differences between FATCA and CRS.
How are investment funds classified for AEOI purposes?
In practice, the vast majority of Cayman Islands investment funds fall within the definition of an Investment Entity (one of the types of Financial Institution under AEOI Legislation) and will be classified as Cayman Reporting Financial Institutions. There are certain differences between the definitions in each of the FATCA Regulations and the CRS Regulations, with the term Foreign Financial Institution being used under FATCA. In this guide we will be discussing 'FIs' or 'Financial Institutions'.
What are the notification obligations?
The most notable notification obligations are:
To register with the Internal Revenue Service of the United States (IRS): to obtain a global intermediary identification number (GIIN) (even if a Reporting FI has no US Reportable Accounts) either through the IRS FATCA Portal or through a paper submission. Registered Deemed Compliant FIs are also obliged to register with the IRS.
A Cayman Islands investment fund which is a Reporting FI is required by the FATCA Regulations to register with the IRS within 30 days of 'starting business'. While a fund is not technically operating until it starts to accept subscription payments from investors (for the purposes, at least, of the Mutual Funds Act), in reality, all funds have to provide their GIIN numbers to banking and other counterparties at a very early stage of their creation in order to open accounts. It is therefore important to get this registration done as soon as possible after the vehicle has been formed.
When registering for a GIIN, the IRS portal requires the name of a natural person to be listed as the FI's Responsible Officer. The Responsible Officer of a Reporting FI will be the person required to deal with the IRS online registration, certify that certain information (entered as part of the on...

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