Cayman Islands
Cayman Islands Where to relocate

Where to Relocate: Cayman Islands with KPMG Cayman Islands

Amid the Cayman Islands’ pursuit of becoming a global financial and technological hub, the introduction of virtual asset service provider (VASP) legislation in 2020 has positioned it as an ideal domicile for digital asset businesses.

Gautam Ganeshan, partner, digital assets, and Gideon Smit, director, digital assets at KPMG explore the compelling reasons behind choosing the Cayman Islands for digital asset operations.

They delve into the VASP Act’s requirements, and highlight the region’s growing prominence in the digital asset fund space.

KPMG in the Cayman Islands, as a leading professional services firm, offers a comprehensive range of services to support businesses in this evolving landscape, from audit and assurance to tax and advisory services.

Gautam Ganeshan Partner, Digital Assets
Gautam Ganeshan (top) and Gideon Smit, KPMG

There are numerous factors for digital asset businesses to consider the Cayman Islands as a place of domicile. As part of the Cayman Islands’ continued efforts to be a leading global financial and technological hub, the Cayman Islands government, in 2020, introduced virtual asset service provider legislation.

This enabled high quality digital asset businesses to establish operations, operate in a regulated manner, and take advantage of all that the jurisdiction has to offer.

Why Cayman Islands

There are several reasons why the Cayman Islands are an ideal place to set up a digital asset business or re-domicile from another jurisdiction. The Cayman Islands are widely recognised as a leading global financial services centre with a strong regulatory and legal environment.

The Cayman Islands Government and the regulator, the Cayman Islands Monetary Authority (CIMA), have fostered an environment which is conducive to innovation and growth while maintaining appropriate safeguards in place to protect customers and stakeholders.

This is evident by observing the government and industry bodies’ early efforts to work together to create a welcoming regime for digital asset businesses, including the VASP Act, with the initial implementation of Phase One commencing in October 2020.

The Virtual Asset (Service Providers) Act

The VASP Act requires all VASPs to be licensed or registered with CIMA. VASPs are entities that issue virtual assets and provides other services, which among others, may include exchanging virtual assets for fiat currencies or other virtual assets, transferring virtual assets, or providing custodial services of virtual assets.

As of October 2023, there are over 20 entities which have been approved as a VASP by CIMA. The entities include OTC desks, brokers, and most recently, a non-custodial virtual assets exchange.

While the Cayman Islands authorities realise the transformative nature of virtual assets, the real-world compliance challenges of virtual assets have not been ignored. VASPs, registered in the Cayman Islands, must appoint an anti-money laundering compliance officer (AMLCO) (which for a VASP, needs to be approved by CIMA), a money-laundering reporting officer (MLRO), and a deputy money-laundering reporting officer (DMLRO).

Additionally, entities are to implement risk-based monitoring procedures requiring, amongst other requirements, that its counterparties are appropriately identified, suitable record-keeping is maintained, and employees are fully trained. The AMLCO, MLRO and DMLRO have the responsibility of overseeing the VASP’s adherence to the AML regulations.

Digital asset funds

The Cayman Islands is a global financial centre with, as of 30 June 2023, close to 30,000 private and hedge funds registered in the Cayman Islands. As with traditional funds, digital asset fund managers are also noting the Cayman Islands as the fund domicile of choice, with several leading digital asset fund managers maintaining registered funds in the Cayman Islands.

Service Offering at KPMG in the Cayman Islands:
Audit and assurance services

KPMG in the Cayman Islands can provide independent audit services designed to enhance the reliability of information prepared by our clients for use by investors, creditors, and other stakeholders in accordance with country-specific statutory requirements. Audit services also include a wide range of other forms of attestation reports.

Tax services

Tax is constantly evolving. Organisations, large and small, are increasingly exposed to new rules, regulations, and trends in local and global tax. Whether individual or corporate, we can help you stay competitive and compliant.

Advisory services

KPMG Advisory professionals work with our clients to create unique propositions and help solve clients’ current needs while providing insight into the future challenges that they may face. We are committed to exceeding the expectations of our clients and supporting them as they grow.

No matter where you are in the business cycle, whether it’s advice on improving the performance of your business, undertaking a transaction, or restructuring your company or advice on how to handle risk and compliance – we can help. KPMG’s advisory practice can provide the following services: Management consulting; Risk consulting; Deal advisory.

KPMG Private Enterprise

Passion is what drives entrepreneurs; it’s also what inspires KPMG Private Enterprise advisers to help you maximise success. You know KPMG; you might not know KPMG Private Enterprise. KPMG Private Enterprise advisers in member firms around the world are dedicated to working with you and your business, no matter where you are in your growth journey – whether you’re looking to reach new heights, embrace technology, plan for an exit, or manage the transition of wealth or your business to the next generation.

Working with KPMG Private Enterprise, you’ll gain access to a trusted advisor – a single point of contact who shares your entrepreneurial mindset. With access to KPMG’s global resources and alliance network, we’ll help you drive your business forward and meet your goals. Your success is our legacy.



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