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Legal Updates

Developments in law or practice in our jurisdictions

Foundation Companies in the Cayman Islands

Author:
Publication Date:
23 February 2017



The Foundation Companies Bill, 2016 (the Bill) seeks to introduce a new type of corporate vehicle in the Cayman Islands, the Foundation Company (the FC). The Bill has been drafted to allow the FC to be rooted in Cayman Islands company law, but function like a civil law foundation. The Bill only applies to companies that have been declared by the Registrar of Companies (the Registrar) to be an FC. This alert sets out the key features of FCs and how they will be able to be formed, if the Bill is approved in its current form. 

Nature of a Foundation Company 

The Bill approaches the creation of an FC in such a way that an FC may consequently be established for any lawful purpose, be it commercial, charitable/philanthropic or private purposes, or any combination of them. An FC shares many of its features with other types of Cayman Islands companies and fits seamlessly into the Cayman Islands’ legal regime. The FC will therefore have the benefit, where relevant, of a considerable body of case law on companies. 

Uses of Foundation Companies 

It is anticipated that FCs will have a wide range of uses such as special purpose vehicles in finance transactions, as charities, protectors or enforcers (in relation to other trusts or fiduciary structures), as mechanisms within private trust company structures, as succession planning vehicles and for any purpose for which a trust is currently used.

Please get in touch with your usual Harneys contact if you have any queries or require any assistance, or visit Harneys Cayman.

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