Dec 2024
Foundation Companies are innovative structures which act as a hybrid between a company and a trust. Although originally introduced in 2017, they have surged in popularity since 2021 with significant year-on-year growth in the number of registrations, an upward trend which has continued to the present. These structures have found their feet and are proving to be an increasingly popular structuring vehicle in a range of different commercial and private wealth contexts.
What is a Cayman Foundation?
As vehicles which act as a hybrid between a company and a trust, Cayman Foundations bridge the benefits of both of those respective structuring options. Foundations have a long history in civil law jurisdictions and their introduction offshore was initially intended to attract clients for whom a trust was not suitable.
Whereas other offshore jurisdictions sought to establish an entirely new set of rules for their respective foundation offerings, the approach in Cayman was to build on the existing Companies Act framework. As such, Cayman Foundations are technically companies (albeit with special features) and Cayman’s Companies Act applies to a Foundation, save to the extent that it is excluded or modified by the Foundation Companies Act or otherwise inconsistent with its provisions. This means that the fundamental corporate structure of a Cayman Foundation is a tried and tested one and legal jurisprudence in respect of Cayman companies will, to the extent it is relevant, also apply to Cayman Foundations.