Comment by yieldcrv | Hacker News Reader

Comment by yieldcrv | Hacker News Reader

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Not sure where to start

Its mostly about the master feeder structure, other times about a sandwich, learn about those

You have a feeder for domestic tax persons, and a feeder for non-domestic tax persons and domestic tax exempt persons

Its usually dumb and pointless to have non-domestic tax persons to use your domestic feeder, because the regulations are poorly thought out and counterproductive and actually serve no purpose.

all feeders are partnerships or limited by shares, and send capital to the master entity which does the trading

the difficulty is that comparison is not just about the US or insulting any one country, many old world countries have withholding done on investment-in which even US people would find absurd. or the accredited investor requirements are much lower.

The attentiveness and accessibility of the regulators is a boon.

Dunno where to start but I hope that inspired on the depth of how deep to look. Its a great financial center.

Can I make a suggestion? Most people in this thread will think you are wrong about the Cayman Islands. In this context, your comment, "Caymans is just a better jurisdiction," is provocative. You also claim you can think of 24 things that are better. Fine. But then this rambling comment with jargon and the all-too-common implication to "do your own research" is, from a rhetorical perspective, not persuasive. I'd be genuinely curious to hear a more detailed, layman-oriented answer.

I can see that

It practically requires people to play devil’s advocate to anything I observe about the cayman islands

But the article also contributed to that, it acts like its a big mystery when the reality is that academic research groups could just never get enough money to dry run forming a hedge fund in the cayman islands and say “oooh I get it”

now they finally did some research and realize this is the worst kept secret, everyone is using the Cayman Islands already for a multitude of reasons that have nothing to do with hiding anything from tax revenues

You said it’s not just a tax blocker. Yet your explanation only explains how it is a tax blocker.

> or the accredited investor requirements are much lower. The attentiveness and accessibility of the regulators is a boon.

Not really, but it's hard to tell through the jargon.

The point is that the Caymans are neutral territory for tax purposes. If you're in the US, you owe US taxes on the profits in your Cayman fund. Likewise, if you're in Canada, you owe Canadian taxes on the profits on your Cayman funds. This is better than setting your investment vehicle up in Delaware, because if you do that, your Canadian investor will have to pay US taxes (that they don't owe) and then spend months trying to get the money back.

The on-shore US regulations are crazy enough that US based institutional investors (like pension funds) will get nervous at the lack of professionalism if you aren't using a Cayman vehicle.

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