We would like to set the tone of this section by giving you in advance the reasons why the Cayman financial licences are superior to those in any other jurisdiction. Here we go:

  • To begin with, we tell you that the Cayman Islands have no direct taxes;
  • This jurisdiction has a banking system that stands face to face with the most sophisticated jurisdictions in Europe and Asia;
  • The world's largest financial services companies have a presence in Cayman territory;
  • This jurisdiction is home to 70% of the world's registered funds, according to some estimates;
  • The Cayman jurisdiction’s reputation as the international financial centre par excellence attracts a steady flow of investors to the Islands;
  • There are various licences available to you: from banking licences to digital asset management licences such as cryptocurrencies;
  • Speaking of digital asset licensing, in the Cayman Islands, there is a type of licence called a sandbox, which is one of the most advanced and favorable legal frameworks for regulating this type of activity;
  • The Cayman telecommunications infrastructure will allow you to carry out any financial service provision without any problem; and
  • Caymani regulations comply with the highest international standards and allow you access to the Cayman Islands’ tax advantages.

The global coronavirus crisis has given carte blanche to governments around the world to increase their restrictions and break into the operation of the financial system without and still maintain scruples. There are fewer and fewer viable places to keep a financial institution open without suffering enormous pressure from governments.

While most governments in the world are taking advantage of the situation to promote anti-market initiatives that hurt the private enterprise, the Cayman Islands is at the other end of the spectrum. 

The Cayman Islands are undoubtedly one of the safest places in the world to acquire a financial licence, whether it is banking, virtual asset management, or securities’ investment business licences.

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Licensing for securities’ investment businesses

The regulatory framework for this type of activity in the Cayman Islands is the Securities’ Investment Business Law (“SIBL”), and the regulatory authority is the Cayman Islands Monetary Authority (“CIMA”).

SIBL states that any person or company incorporated or registered in the Cayman jurisdiction and conducting securities investment business must have a licence issued by CIMA, with very few exceptions (excluded persons and activities).

In English, these are the types of businesses that are commonly required to have this type of license in the Cayman Islands:

  • Investment managers;
  • Investment advisers;
  • Market makers;
  • Broker/dealers; and
  • Market intermediaries.

Now let's look at the process of applying for these types licences.

An application for a licence to carry on securities investment business must be submitted along with a specific form, supporting compliance documentation, and the fee required by CIMA. In short, if you want to apply for this licence, you must satisy CIMA that:

  • You will be able to comply with the SIBL and any regulations thereunder;
  • You will be able to comply with The Anti-Money Laundering Regulations and Counter Terrorist Financing regimes; 
  • Approval of the application will not be against the public interest, including the need to protect investors;
  • You have the necessary qualified personnel, infrastructure and facilities in regard to the nature and scale of your business; and
  • The senior officers and managers of the applicant are fit and proper persons.

After making your application, CIMA will give you its answer in approximately two to three weeks.

Virtual Assets Management Licence

This recent regulation makes the Cayman Islands even more attractive for investors interested in virtual asset management because now their legal framework conforms to international standards while still offering the range of Cayman advantages to which we are accustomed.

To make it even more transparent, we summarise what a Virtual Asset Service Provider (“VASP”) is according to the new Cayman law:

The VASP Law defines a VASP as:

  • A Cayman entity that provides virtual asset services, as a business or within the course of a business in or from within the Cayman Islands, and is registered or licensed following the VASP Law or is an existing licensee that is granted a waiver.

A virtual asset service is any of the following businesses provided for or on behalf of another party:

  • Virtual asset exchange (whether to or from fiat or other virtual assets);
  • Transfers of virtual assets;
  • Custody services; and
  • Participation in, and provision of, financial services related to a virtual asset issuance or the sale of a virtual asset.

This new law only licenses and regulates those engaged in relevant financial business involving virtual assets for or on behalf of a third party.

Virtual assets themselves, as well as those who use virtual assets or VASPs for their private affairs, will not be affected by this law.

Under the new law, those wishing to undertake virtual asset services from the Cayman Islands must register or receive an appropriate licence from CIMA. 

The law also introduces the concept of a sandbox licence that provides CIMA with the flexibility to regulate VASPs.

A sandbox license is meant to operate for a limited timeframe (one year) so that CIMA can assess how best to regulate a sandbox licence applicant and whether legislative changes may be required further to promote the innovative development of virtual assets related businesses. 

Obtaining a virtual assets management license or registration in the Cayman Islands:

If you are thinking of having a VASP in the Cayman Islands, you will need a virtual asset service licence issued by CIMA.

CIMA focuses on three main aspects when approving applications for virtual asset service licences: 

  • That the approval of the license does not go against the public interest;
  • That the applicant has the appropriate personnel with the right training, experience, facilities, equipment, accounting systems, capital, and cybersecurity measures according to the size, scope, and complexity of their business; and
  • That the applicant has complied with other requirements under the Law upon CIMA's request.

Always keep in mind that CIMA may consider other factors or require specific information if it believes the case requires it.

For those not involved in custodial or virtual assets trading services, instead of a licence, it is only necessary to register with CIMA.

Who are we, and what can we do for you?

Mundo experts have been helping investors and business people maximize their freedom and assets around the world for a long time.

Our global presence consists of a body of renowned experts in each jurisdiction. And the Cayman Islands are no different. Our Cayman experts can help you with obtaining a financial license in the Cayman Islands.

A financial license in one of the most established jurisdictions on the planet, combined with a global context that encourages people to keep their money in safer places, is a very favorable combination for offering financial services in a secure jurisdiction like the Cayman Islands. And we can get you there.

If you want to start the process of obtaining a financial license in the Cayman Islands, contact us! 

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Years of practice in his field: 18