Hedge Funds

New tax rule sends Bermuda funds packing for Cayman

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A change in European Union tax regulation has left a number of hedge funds based in Bermuda packing for a new home in the Cayman Islands. Since the EU directive took effect in July, some 25 funds worth $5.7 billion have relocated to Cayman from Bermuda, according to the Cayman Island Financial Services Authority.

The directive exempts Bermuda companies from reporting the income of EU residents generated by offshore funds domiciled there - an exclusion Bermuda lobbied for as a way to give it a competitive edge over its Cayman rival, which does report investor and fund income