The Cayman Islands Foundation Companies regime came into force on Thursday, 19 October following the Gazettal of The Foundation Companies Law, 2017 (Commencement) Order, 2017; and the publication of related fee regulations.
It is anticipated that this new Cayman Islands business vehicle will give the financial services industry a competitive advantage through increased versatility in the international market.
In a note on the subject, Conyers Dill & Pearman said it anticipates the new structure will fit seamlessly into Cayman’s legal regime, and “offer up an attractive and flexible structuring tool for private clients with offshore interests, regardless of whether they are located in civil law countries or common law jurisdictions. Foundations are also expected to be useful to commercial lawyers in securitization transactions, as an alternative to the traditional special purpose vehicle under a purpose trust”.
Similar to how a limited liability company (which is a variant of a company) is infused with functions of a partnership, a foundation company would also be a variant of a company.
Foundation companies aim to introduce a special type of company that blends certain key advantages of trusts and of companies in one vehicle. They offer clients a more satisfactory structure, allowing for the ability to have no shareholders and entrenched objectives. Foundation companies can therefore be used in a wide variety of situations, including commercial and philanthropic purposes.
Foundations are subject to the same transparency, and AML/CFT provisions, as a company.
General Registry is providing instructions to the Foundations Companies online system to its current online system subscribers. The instructions include the complete Foundation Companies fee schedule.
The Ministry of Financial Services thanks the Financial Services Legislative Committee; the Foundation Companies sub-committee, which included representatives from Collas Crill, Walkers and Appleby; and the General Registry for the time and efforts they dedicated to the preparation of the Foundation Companies Law, 2017.
Cayman Islands Foundation Companies, Cayman Islands