FOUNDATION COMPANIES

We are experienced in the formation of Foundation Companies, a new type of Cayman Islands corporate vehicle for structuring private and commercial wealth. Foundation companies (introduced under the Foundation Companies Law (2017 Revision) function like a civil law foundation, but within the ambit of Cayman Islands company law, which makes them a flexible and innovative, yet familiar structure for multiple applications.

 

Characteristics of foundation companies include: Body corporate with limited liability and separate legal personality which can sue and hold assets in its own name (rather than through a trustee); unlike other corporate vehicles, there is no need for a foundation company to have members – instead, a supervisor may be appointed to attend and vote at general meetings; unlike a trust, officers’ duties are owed to the foundation company and not to beneficiaries and rights can only be enforced against the company and not its directors or officers; the default position is that beneficiaries have no rights save for those provided for in the constitution; not subject to any corporate, income, withholding or capital gains taxes within the Cayman Islands; considerable flexibility regarding the objects, management, officers, ownership and dispositive arrangements; the constitution can be “entrenched” meaning that the founder has the power to curtail future amendments to the constitution; in comparison to a trust, certainty regarding the validity and existence of the entity and due to the corporate structure, decreased risk of recognition in foreign courts.

 

Possible applications of foundation companies include:
• As a private wealth solution in place of a trust.
• Holding shares of private trust companies or in STAR trust structures.
• Use in blockchain structures (including on initial coin offerings).
• Conduct of family business for business succession planning or asset protection.
• Funding of philanthropic projects or non-profit making enterprises.
• Holding high-risk assets or less diversified portfolios.

Key Contact
DANIEL PRIESTLEY - MANAGING PARTNER


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There are many offshore law firms. They all know the law. Then there are the rare law firms who not only know the law, they understand people and their business needs. Priestleys knows the law. We also understand. We believe this is what sets us apart as a best-in-class Cayman legal and fiduciary services provider.

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