The Cayman Islands government is constantly creating new legislation and financial products to support its thriving business community. In 2017 the Cayman Islands enacted legislation for the formation and registration of foundation companies. Unlike the traditional company, a foundation company may have no shareholders and may entrench its objectives.
Other key elements of a foundation company is that whomever the founder wants can be given rights, powers and duties (not just to existing members, directors or supervisors). A foundation company may also entrench the objectives of the company or specific provisions within the constitution and may have by-laws to govern the exercise of discretion by those who have duties or powers under the constitution. The by-laws do not have to be filed, and they do not affect a third party dealing in good faith with the foundation company.
As a relatively new type of company, that is free of the current perceived drawbacks of a company or trust, the foundation company provides an attractive alternative in a range of wealth planning and commercial scenarios. It is anticipated that foundation companies will continue to open up a variety of interesting estate and other planning possibilities and will be used for commercial, philanthropic and other private purposes.