Foundation companies may be incorporated in the Cayman Islands with effect from 19 October 2017. The foundation company will be a highly flexible vehicle for achieving a wide range of private client, family office and philanthropic objectives.
Key features of a foundation company are as follows:-
A foundation company is a body corporate with legal personality distinct from that of its members, directors, officers, supervisors and founder. Hence, it has capacity to sue and be sued and to hold property.
May be formed for any lawful object which need not be beneficial to other persons. It may be used as holding company or investment company or providing financial assistance or benefits to beneficiaries.
A foundation company must be limited by shares or by guarantee with or without share capital.
A foundation company may have supervisor(s), which are persons, other than members, who under the foundation company’s constitution have a right to attend and vote at general meetings, whether or not the person has supervisory powers or duties. Register of supervisors must be kept at its registered office.
A foundation company must at all times maintain a qualified person as its secretary. A qualified person is a person who is licensed or permitted by the Companies Management Law (2003 Revision) to provide company management services in the Cayman Islands.
Constitution of a foundation company may grant or authorise the grant to any person or description of persons, whether or not ascertained or in existence, the right to become a member of the foundation company and such right is enforceable by action against the foundation company. A foundation company may cease to have members if its memorandum so permits or requires and it continues to have one or more supervisors.
Ceasing to have members will not affect the foundation company’s existence, capacity or powers. If a foundation company has ceased to have members, it may not subsequently admit members, or issue shares, unless expressly authorised to do so by its constitution. The liability of members is limited.
There are no forms of relevant direct taxation in the Cayman Islands. If the objects of a foundation company are to be carried out outside the Cayman Islands, application may be made to register the foundation company as an exempt company. Such registration will make the foundation company eligible for a tax exemption undertaking.
Please contact your usual Kensington Trust Group contact or write to email@example.com if you have any questions.