FATCA and CRS Requirements for Cayman Funds: A Practical Guide for Fund Managers

By CV5 Capital – The Institutional Platform for Global Hedge Funds and Digital Asset Funds

For any manager launching a Cayman fund—whether traditional or digital-asset focused, understanding FATCA and CRS obligations is essential. These regimes impose reporting requirements designed to prevent tax evasion, and Cayman funds must comply annually through filings with the Cayman Islands Department for International Tax Cooperation (DITC).

CV5 Capital ensures that every fund on our platform meets these global standards through turnkey compliance support, administrator coordination, and governance oversight via Bell Rock Group.

This article outlines the FATCA and CRS frameworks, the specific obligations for Cayman funds, and how CV5 Capital supports managers throughout the reporting lifecycle.

1. Overview of FATCA and CRS

A. FATCA (Foreign Account Tax Compliance Act – United States)

FATCA is a US tax regime requiring non-US financial institutions—including Cayman funds—to identify and report information about US persons investing in offshore vehicles.

Key objectives:
• Prevent tax evasion by US persons
• Require reporting of financial account information to the IRS
• Impose withholding on non-compliant funds

Cayman has an Intergovernmental Agreement (Model 1 IGA) with the US, meaning all reporting is done through Cayman’s DITC rather than directly to the IRS.

B. CRS (Common Reporting Standard – OECD)

CRS is a global tax-transparency regime adopted by more than 100 jurisdictions. It requires financial institutions—including Cayman funds—to identify and report non-resident account holders to their home tax authorities.

CRS is significantly broader than FATCA, covering:
• More jurisdictions
• More investor types
• More reporting categories

Both regimes apply to virtually all Cayman hedge funds, private funds, and segregated portfolios.

2. Which Cayman Funds Are In-Scope for FATCA/CRS?

In the Cayman Islands, most regulated or unregulated investment funds are classified as Financial Institutions (FIs) under both regimes, including:
• Exempted companies
• Segregated portfolio companies (SPCs)
• Limited partnerships
• Unit trusts
• Master-feeder structures
• Digital asset funds
• Segregated portfolios under CV5 SPC orCV5 Digital SPC

These vehicles must complete annual filings, even if they have no reportable investors.

Funds that do not meet FI criteria must classify as Non-Financial Foreign Entities (NFFEs), but this is rare for Cayman investment structures.

3. FATCA/CRS Obligations for Cayman Funds

Cayman funds have three primary responsibilities:

A. Initial Registration on the DITC Portal

All in-scope Cayman funds must:
1. Register on the DITC Portal
2. Appoint a Principal Point of Contact (PPoC)
3. Appoint an Authorised Person (AP)
4. Provide GIIN (Global Intermediary Identification Number) for FATCA, unless exempt
5. Confirm entity classification (FATCA status and CRS status)

CV5 Capital can act as PPoC and manage all portal obligations.

B. Annual FATCA/CRS Reporting

Reporting deadlines are typically:
• 30 April: Annual CRS Filing Declaration
• 31 July: CRS XML Reporting & FATCA XML Reporting
• 31 July: CRS Compliance Form

A fund may need to submit:

FATCA
• FATCA XML report (if US reportable accounts exist)
• FATCA Reporting Declaration (even if nil)

CRS
• CRS XML report (if reportable accounts exist)
• CRS Filing Declaration (mandatory)
• CRS Compliance Form (mandatory annually, regardless of activity)

“Nil” reports are required even if the fund has no US persons or no CRS-reportable investors.

C. Ongoing Due Diligence Requirements

Cayman funds must maintain documented processes to:
• Collect self-certifications (FATCA/CRS forms) from all investors
• Review GIINs, TINs, and tax residency information
• Assess “change of circumstances”
• Identify controlling persons of entities
• Monitor AML/KYC and tax reporting alignment
• Maintain records for at least six years

The fund administrator typically performs day-to-day due diligence, but the fund’s board is ultimately responsible, which is why CV5 ensures strong governance through independent directors.

4. Investor Onboarding Requirements

All investors must complete FATCA/CRS self-certification forms.

Individuals:
• FATCA W-8 or W-9 form
• CRS individual self-certification
• Tax identification numbers (TINs)

Entities:
• FATCA entity self-certification (GIIN, classification, status)
• CRS entity self-certification
• Controlling-person declarations for Passive NFFEs

Without these forms, a Cayman fund cannot admit an investor.

CV5’s digital onboarding process streamlines collection of FATCA/CRS documentation as part of AML/KYC onboarding.

5. Consequences of Non-Compliance

Cayman takes compliance extremely seriously. Failure to comply may result in:
• Monetary penalties
• Immigration and director sanctions
• Deregistration of the fund
• Suspension of CIMA status
• Significant issues during investor ODD reviews
• Reputational harm
• Refusal by administrators or banks to continue servicing the fund

The DITC also shares information with international tax authorities under Automatic Exchange of Information (AEOI) frameworks.

6. How CV5 Capital Ensures FATCA/CRS Compliance for All Funds

CV5 Capital provides an end-to-end FATCA/CRS compliance framework for every fund launched on our platform.

A. DITC Portal Setup
• Register the fund
• Appoint PPoC and Authorised Person
• Manage yearly filings
• Maintain portal updates and certifications

B. Integration with Administrators

We work with tier-1 administrators to ensure:
• Automated FATCA/CRS data collection
• Investor-level due diligence
• XML reporting file preparation
• Reconciliation between AML/KYC and reporting data

C. Independent Governance

Independent directors oversee:
• FATCA/CRS policies
• Due diligence testing
• Review of annual filings
• Compliance audits
• Board-level review of reporting classifications

D. Annual Compliance Calendar

CV5 manages all reporting timelines, declarations, and follow-ups to ensure no deadlines are missed.

E. Investor-Ready Documentation

We prepare and maintain:
• FATCA/CRS policies
• Offering document disclosures
• Compliance statements for investor due diligence
• Annual FATCA/CRS confirmation letters

Managers can focus on trading while CV5 handles regulatory compliance.

7. Why FATCA/CRS Strengthens Cayman’s Position as a Global Fund Hub

Cayman’s robust compliance regime enhances:
• Investor confidence
• International tax-transparency standards
• Global cooperation with OECD and US regulatory bodies
• Due diligence credibility during ODD audits

Cayman remains the preferred jurisdiction for institutional hedge funds and digital-asset funds precisely because it combines regulatory sophistication with operational flexibility.

Conclusion: FATCA and CRS Compliance Made Efficient with CV5 Capital

FATCA and CRS are central pillars of global tax transparency, and Cayman funds must comply annually with reporting, due diligence, and investor onboarding requirements. These obligations can be complex, particularly for emerging managers launching their first fund.

CV5 Capital provides a turnkey compliance solution, ensuring all FATCA/CRS requirements are met through world-class administrators, governance oversight, digital onboarding, and systematic reporting. Managers launching on our platform can focus entirely on portfolio performance, while CV5 handles regulatory infrastructure with precision and efficiency.

If you are launching a fund or require assistance with FATCA/CRS obligations, CV5 Capital stands ready to support you.

‍