James Gaden & Alice Molan Discuss Economic Substance with Bloomberg

Speaking to Bloomberg, partners James Gaden and Alice Molan discuss Cayman Islands "Economic Substance" and how it affects hedge funds.

"Hong Kong hedge funds have found themselves in the crosshairs of a global crackdown on multinational companies that use subsidiaries in tax havens to lower liabilities.

A new rule introduced by the Cayman Islands that took effect in January requires companies within its purview to maintain an “economic substance” in the territory. Firms involved in nine activities are covered, including funds management, banking, finance and leasing. Economic substance will be assessed on a case-by-case basis but covers things such as “adequate and appropriate" office premises, personnel and expenditure."

 

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