A Guide to New Legislation on Foundation Companies in the Cayman Islands


The Cayman Islands Foundation Companies Law, 2017 (‘Foundation Law’) has now come into force. A Foundation Company has features and flexibility that have been designed to allow a company, retaining separate legal personality and limited liability, to function like a civil law foundation or common law trust.

It is expected that its uses may include as a holding vehicle for shares in a private trust company, as a protector or enforcer of a trust, as a special purpose vehicle in finance or commercial transactions, including in crypto-currency and other technology offerings, as well as a traditional succession planning vehicle.

For private clients, Foundation Companies may be an attractive alternative to trusts, particularly for those clients in civil law jurisdictions where there are concerns about the tax treatment of trusts.

It is possible to use Foundation Companies to act as “ownerless” vehicles which will make them, simple solutions in the context of private trust companies, management shares of investment funds or in wider commercial transactions.

Corporate status

As a company incorporated under the Companies Law (Revised), it will be a body corporate with a legal personality distinct from its members, directors and other connected persons.


Any new or existing company incorporated under the Companies Law (Revised) may apply to the Registrar of Companies (‘Registrar’) to be declared to be a Foundation Company provided that the following conditions for a Foundation Company have been met:

  • is limited by shares or by guarantee, with or without share capital;
  • has a memorandum that:

- states that it is a Foundation Company;

- describes its objects (which may include beneficiaries);

- provides, directly or by reference to its articles, for the disposal of surplus assets on winding up; and

- prohibits dividends or other distributions to members;

  • has adopted articles; and
  • has a secretary who is a person licensed to provide company management services in the Cayman Islands (Secretary).

If all of the conditions have been met, the Registrar will issue a certificate of incorporation (or in the case of an existing company, a new certificate of incorporation) with a declaration that the company is a Foundation Company.


A Foundation Company’s constitution may grant any person the right to become a member. It can cease to have members if (i) its memorandum permits, and (ii) it continues to have a supervisor, who has a right to attend and vote at general meetings (‘Supervisor’). Ceasing to have members in these circumstances will not affect the Foundation Company’s existence. Once it has no members, the Foundation Company will not be able to admit new members or issue shares unless its constitution permits it.

A Foundation Company’s management will be carried out by its directors. The operation and management of the Foundation Company is flexible and allows for any powers to be given for the benefit of (i) the Foundation Company, (ii) power holder, or (iii) for any other purpose.

Unless varied by the constitution:

  • duties are owed only to the Foundation Company itself;
  • rights are enforceable only against the Foundation Company;
  • rights to information are limited to “interested persons” who are defined under the Foundation Law as any of its members or supervisors, someone with the right to be a member or supervisor or someone declared under the Foundation Company’s constitution to be an interested person (‘Interested Persons’);
  • Interested Persons can bring actions in the name of or on behalf of the Foundation Company for the enforcement of directors’ duties in the same way as members of traditional companies; and
  • beneficiaries have no powers or rights in relation to the Foundation Company, its management or its assets.

Assets and investments

There is no minimum capital requirement for a Foundation Company. Any person can transfer assets to it, although the Secretary must give notice that there appear to be no objections under regulatory laws to the Foundation Company accepting it.

The “firewall” feature of the Trusts Law (Revised) is extended to Foundation Companies; this gives protection against claims in foreign courts to the transfer of assets to the Foundation Company.


The combination of traditional and innovative features of a Foundation Company means that the Cayman Islands has introduced a flexible vehicle that is a valuable addition to all sectors of the financial services industry.


Partner, Ogier Cayman Islands