varied and have been developed to work
in complicated and innovative interna-
tional business structures. The Com-
panies Law and other legislation of the
Cayman Islands are reviewed constantly
to ensure that the Cayman Islands keep
abreast of the evolving economy.
The most popular company in the
Cayman Islands is known as an exempt-
ed company. It is usually incorporated
with a share capital and allows inves-
tors to limit their liability to the amount
unpaid on their shares. To incorporate an
exempted company, an individual may
retain an attorney, accounting firm or
other licensed service provider. After the
relevant information has been provided,
including references, identification mate-
rial, source of funds certifications and
business purpose, a service provider may
cause the relevant corporate governance
documentation which regulates the
exempted company's affairs to be filed
with the Registrar of Companies. The
exempted company is formed on the
same day of filing. An exempted com-
pany need only have one shareholder and
that shareholder may appoint a director.
More than one director is not required for
unregulated exempted companies. The
board of directors will run and manage
the day-to-day operations of the com-
pany. There is no requirement to have
Cayman Island resident directors or hold
meetings in the Cayman Islands as a
matter of Cayman Islands law.
The exempted company is required
to maintain a registered office in the
Cayman Islands where its books and
records are kept and where documents
may be served. Unregulated exempted
companies are not required to have an
annual audit or file annual accounts with
the Registrar of Companies. Every year
the company is required to file returns
with the Registrar of Companies and pay
a fee to maintain its registrations. The
exempted company needs no govern-
mental permission for incorporation or to
carry on business in the Cayman Islands
in furtherance of its international objec-
Cabinet it is possible to obtain a guaran-
tee from the Government of the Cayman
Islands that it will not be taxed for 20
years from the date of the certificate and
an application to renew the guarantee
may be made during the 20 years.
nies, the Companies Law and other
statutory provisions allow for a variety
of corporate investment vehicles and
structures. These include companies
limited by guarantee, companies limited
by duration, limited partnerships which
provide limited liability protection for
investors who hold partnership interests.
The Cayman Islands, like other juris-
dictions, has seen an increasing use of
segregated portfolio companies. These
companies allow for the creation of one
or more segregated portfolios in order
to segregate the assets and liabilities
of the segregated portfolio company
held within or on behalf of a segregated
portfolio from the assets and liabilities
of the segregated portfolio
company held within or
on behalf of any other
segregated portfolio
of the company.
These types of
structures
are con-
venient
for hedge
fund operators
and captive
insurers, as
investors in
one segregated
portfolio do
not bear the
risks of inves-
tors in another
segregated port-
folio within the
same segregated
portfolio company.
Investment vehicles
are used for many
purposes and, subject
to compliance with the
nance documentation, the company can
remit capital or income earned to and
from the Cayman Islands. Provided busi-
ness is carried on in a legitimate manner,
the laws of the Cayman Islands do not
permit confidential information belong-
ing to the company or an individual to be
provided to third parties without the con-
sent of management and or shareholders.
When considering establishing
any structure to include incorporating
an entity in the Cayman Islands, the
promoter should not only take the ap-
propriate legal and regulatory advice in
the Cayman Islands, but they should also
obtain competent advice on the relevant
statutory provisions in their own jurisdic-
tion or in those jurisdictions which the
Cayman Islands entity is doing or will
do business.