Exempted Limited Partnerships

An exempted limited partnership is an arrangement established under the Exempted Limited Partnership Law in the Cayman Islands and is an entity comprising both General and Limited Partners. It was created as an improvement to the Limited Partnership which exists under the Partnership Law and to meet a demand from financial institutions in the United States for a limited partnership that could be used for mutual funds in the Cayman Islands

An exempted limited partnership is not a separate legal entity but an arrangement with contractual obligations affecting the partners set out in a partnership agreement.

The name of the arrangement must include the words ‘Limited Partnership’ or the letters ‘L.P.’ or “LP”

An exempted limited partnership may be entered into for a fixed term or have unlimited duration.

At least one general partner must be:

  • a person resident in the Cayman Islands;
  • a company incorporated in the Cayman Islands;
  • a partnership registered in the Cayman Islands; or
  • a foreign company registered in the Cayman Islands

The limited partners invest capital for the partnership business but have the benefit of limited liability to the extent of their interest in the partnership. Further the limited partner’s interest may generally be redeemed at any time without requiring dissolution of the exempted limited partnership.

As its name indicates a Tax Exemption Certificate can be obtained in the same way as for Exempted Companies.

The exempted limited partnership provides a convenient alternative to corporate mutual funds and unit trusts for offshore investors.