Step 1

Preheat the oven to 350°F. Line two 12-cup muffin pans with paper liners.

Step 2

In a medium bowl, whisk together the flour, baking powder, and salt.

Step 3

In a large bowl or the bowl of a stand mixer with the paddle attachment, beat the sugar and butter on medium speed until light and fluffy, about 3 minutes. Beat in the vanilla. Add the eggs one at a time, and beat until well combined before adding the next. Stop and scrape down the bowl as needed.

Step 4

With the mixer on low speed, add in the flour mixture alternating with the coconut milk. Scrape down the bowl and stir in the coconut. Fill the cupcake papers about three-quarters full.

Step 5

Bake for 20 to 23 minutes or until a wooden pick inserted into the center of a cupcake comes out clean. Cool the cupcakes in the pan for a few minutes, then remove and cool completely on a wire rack before frosting.

Step 6

In a large mixing bowl or the bowl of a stand mixer with the paddle attachment, beat the butter and cream cheese on medium speed until smooth. With the mixer on low speed, gradually mix in the powdered sugar until combined. Add the vanilla and coconut milk and beat on medium-low speed until fluffy, about 1 minute.

Step 7

Transfer the frosting to a piping bag fitted with a decorative tip and pipe onto the cupcakes. Sprinkle coconut on top of each cupcake. Cupcakes can be stored for up to 3 days in an airtight container at room temperature.