Investing from Cayman Islands

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Topic Author
rocky4thee
Posts: 2
Joined: Sun Jul 18, 2021 12:06 pm

Investing from Cayman Islands

Post by rocky4thee »

I am Cayman resident and hold Cayman passport.
New to investing. With very little knowledge.
With my limited research what I understand is investing in Index funds ( vanguard or fidelity) is the way to go.
My question is how can I do it from here.
My vision is for long term investing. I would appreciate any help regarding this. Also what I need to do or be aware when I do my investing.
Thank you in advance.
DJN
Posts: 996
Joined: Sun Nov 19, 2017 11:30 pm

Re: Investing from Cayman Islands

Post by DJN »

Hi,
according to Investopedia:
"In addition to having no corporate tax, the Cayman Islands impose no direct taxes whatsoever on residents. They have no income tax, no property taxes, no capital gains taxes, no payroll taxes, and no withholding tax. They are therefore considered tax neutral".
There is no tax treaty with the US but there is some form of tax agreement. Its not clear whether you should therefore hold UCITS ETFs or not.
Maybe you could research that further.
The non-US Bogleheads Wiki can help on simple UCITS portfolios if that is the best tax solution:
https://www.bogleheads.org/wiki/Buildin ... portfolios
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Always passive
Posts: 1265
Joined: Fri Apr 14, 2017 4:25 am
Location: Israel

Re: Investing from Cayman Islands

Post by Always passive »

If you are not a US citizen, you should not invest in US domiciled ETFs or funds like Vanguard or Fidelity. Doing that will subject you to inheritance tax on investments totaling over $60k. Foreigners that wish to invest in ETFs, should investigate iShares ETFs domiciled in Ireland.
Jim Burnham
Posts: 34
Joined: Fri May 21, 2021 6:51 pm

Re: Investing from Cayman Islands

Post by Jim Burnham »

You might talk with Scotiabank in Cayman (https://ky.scotiabank.com/personal.html) or RBC Cayman (http://www.rbcroyalbank.com/caribbean/cayman/index.html) and see what investment options they offer you. I know Scotiabank does offer some mutual funds. It might be worth talking with Interactive Brokers also (https://www.interactivebrokers.com/en/home.php) as they do business world-wide. But I would be sure to ask them (Interactive Brokers) if you as a Cayman Islands citizen won't have any paperwork or reporting regarding the U.S. government. I don't know the answer to that.
Jim Burnham
Posts: 34
Joined: Fri May 21, 2021 6:51 pm

Re: Investing from Cayman Islands

Post by Jim Burnham »

I just found this thread here and would recommend you read it:

viewtopic.php?t=269458
ShadowCat
Posts: 255
Joined: Thu Nov 05, 2015 4:02 pm

Re: Investing from Cayman Islands

Post by ShadowCat »

Always passive wrote: Mon Jul 19, 2021 8:56 am If you are not a US citizen, you should not invest in US domiciled ETFs or funds like Vanguard or Fidelity. Doing that will subject you to inheritance tax on investments totaling over $60k. Foreigners that wish to invest in ETFs, should investigate iShares ETFs domiciled in Ireland.
Just wanted to clarify this post: the actual company isn't relevant, it's the domicile of the ETF. For example, while Vanguard and Blackrock are American companies that issue many US domiciled ETFs and financial products, they also have plenty of Irish domiciled UCITS ETFs that you can purchase that completely avoid US estate taxes. Don't ever be put off from purchasing an ETF just because the parent company happens to be American. What matters is the domicile of the actual financial product, in this case ETF.

Consequently, you most certainly can purchase Vanguard funds contrary to what the above post says.

Ireland has no estate/inheritance tax on ETFs for persons who are neither Irish domiciled nor resident, and thus holding Irish situs ETFs is fine for you as a non-US tax person resident outside the US from an estate tax standpoint.
Topic Author
rocky4thee
Posts: 2
Joined: Sun Jul 18, 2021 12:06 pm

Re: Investing from Cayman Islands

Post by rocky4thee »

Thank you to all that took time to give me advice.

I am reading about Irish domicile ETF and will do more research. Also scheduling appointment with the above mentioned banks and learn more from them

Have dowloaded ETORO app which was recommend by someone elsewhere and try that out too.
so to buy Irish Domicile funds can that be done directly from the issuing companies or should I go thru my banks or brokerage like etoro or interaactive brokers that was suggested.
Always open to more advice or suggestions that any of you think is necessary.
Thank you
ShadowCat
Posts: 255
Joined: Thu Nov 05, 2015 4:02 pm

Re: Investing from Cayman Islands

Post by ShadowCat »

rocky4thee wrote: Mon Jul 19, 2021 7:48 pm Thank you to all that took time to give me advice.

I am reading about Irish domicile ETF and will do more research. Also scheduling appointment with the above mentioned banks and learn more from them

Have dowloaded ETORO app which was recommend by someone elsewhere and try that out too.
so to buy Irish Domicile funds can that be done directly from the issuing companies or should I go thru my banks or brokerage like etoro or interaactive brokers that was suggested.
Always open to more advice or suggestions that any of you think is necessary.
Thank you
You purchase Irish domiciled UCITS ETFs (or any ETF actually) through your brokerage firm, not through the issuing company. This is because as a non-authorized participant, which you would be as a retail investor, you cannot directly create or redeem ETF blocks like large authorized participants can. You thus purchase the ETFs on the secondary market. This is completely normal and how the vast majority of us purchase ETFs.

For example, Blackrock iShares ETFs are purchased on the secondary market through your brokerage firm not directly from Blackrock itself. Certain extremely large authorized participants create/redeem ETF shares in large blocks from Blackrock, but you would not be one of those participants.
Always passive
Posts: 1265
Joined: Fri Apr 14, 2017 4:25 am
Location: Israel

Re: Investing from Cayman Islands

Post by Always passive »

ShadowCat wrote: Mon Jul 19, 2021 6:43 pm
Always passive wrote: Mon Jul 19, 2021 8:56 am If you are not a US citizen, you should not invest in US domiciled ETFs or funds like Vanguard or Fidelity. Doing that will subject you to inheritance tax on investments totaling over $60k. Foreigners that wish to invest in ETFs, should investigate iShares ETFs domiciled in Ireland.
Just wanted to clarify this post: the actual company isn't relevant, it's the domicile of the ETF. For example, while Vanguard and Blackrock are American companies that issue many US domiciled ETFs and financial products, they also have plenty of Irish domiciled UCITS ETFs that you can purchase that completely avoid US estate taxes. Don't ever be put off from purchasing an ETF just because the parent company happens to be American. What matters is the domicile of the actual financial product, in this case ETF.

Consequently, you most certainly can purchase Vanguard funds contrary to what the above post says.

Ireland has no estate/inheritance tax on ETFs for persons who are neither Irish domiciled nor resident, and thus holding Irish situs ETFs is fine for you as a non-US tax person resident outside the US from an estate tax standpoint.
What is said by this poster is correct. I referred to vanguard because they have a very limited collection of Irish domiciled ETFs, and I am aware of no fidelity Irish domiciled ETFs. This, while ishares, from Blackrock has a large number and should satisfy your needs.
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