07 October 2016

Sustainability of Offshore: using Cayman for investment into Africa

The use of offshore is an integral part of African financing. Offshore vehicles are used for a variety of structures for African financing, including bond issuances, listing, loan financing, JVs and PE structures. Investors in and out of Africa have an appetite for using offshore in various transactions because they understand the benefits of structuring transactions, in particular through Cayman Islands vehicles. This need for offshore and the realisation that offshore vehicles are an attractive conduit for foreign direct investment into Africa (FDI) has prompted a few African countries including Mauritius, Seychelles, Ghana, Liberia and Botswana to attempt to mirror the success of Cayman by establishing themselves as International Financial Centres (IFCs). However, as a result of its modern courts system, compliance culture and adherence to international standards in terms of tax transparency Cayman remains a go-to jurisdiction for investment into Africa.

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