Cayman Islands Exempted Limited Partnership

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Cayman Islands Exempted Limited Partnership

The Cayman Islands Exempted Limited Partnership (ELP) is one of the world's most widely used investment fund structures and is the vehicle of choice for hundreds of major global private equity, hedge fund, and infrastructure fund managers. An ELP is formed under the Exempted Limited Partnerships Act of the Cayman Islands, which requires at least one general partner (with unlimited liability) and at least one limited partner (whose liability is limited to the amount of their capital commitment to the ELP). Unlike a Cayman Islands company, an ELP does not have separate legal personality: its assets and liabilities belong to the general partner and the limited partners jointly, and the ELP cannot sue or be sued in its own name.

The Cayman Islands ELP is tax neutral: the Cayman Islands imposes no income tax, no capital gains tax, no corporation tax, no withholding tax, no estate duty, and no stamp duty on transfers of ELP interests, providing a fully tax neutral environment for fund structures of all kinds. The ELP is required to register with the Cayman Islands Monetary Authority (CIMA) if it is used as a regulated investment fund. CIMA registration provides institutional investors with confidence in the governance, compliance standards, and oversight of the fund. The ELP agreement governs all aspects of the relationship between the general partner and the limited partners, including capital commitments, investment restrictions, management fees, carried interest, and exit provisions.

Widely Recognised Fund Structure

The Cayman Islands ELP is the globally recognised standard vehicle for private equity, hedge fund, real estate, and infrastructure fund structures, used by hundreds of major international fund managers and widely accepted by institutional investors worldwide.

Tax Exempt Status

The Cayman Islands imposes no income tax, capital gains tax, corporation tax, withholding tax, estate duty, or stamp duty on ELP interests or ELP income, providing a fully tax neutral environment for all types of international fund structures registered in the Cayman Islands.

Limited Partner Liability

Limited partners in a Cayman Islands ELP have liability capped at the amount of their capital commitment to the ELP, provided that they do not participate in the active management and control of the ELP's business, preserving the essential limited liability protection of the structure.

CIMA Registration for Investment Funds

A Cayman Islands ELP used as an investment fund must register with the Cayman Islands Monetary Authority (CIMA) under the applicable regulatory category, providing a layer of regulatory oversight and institutional credibility that is required by most institutional limited partners.

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