October 27, 2020

The main advantages for clients of using Cayman Islands corporate structures


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102795By Gary Smith, Loeb Smith From HG.org Legal Resources

What is the single most important advantage that Cayman Islands corporate structures provides to clients?

Cayman corporate structures allows clients to maximise the flexibility and other benefits of utilizing such structures in international finance transactions and/or investments: the ability to structure group businesses with a holding company to maximise investment and tax efficiency, effect IPOs, merge or consolidate with another Cayman company or a company from another jurisdiction that permits mergers or consolidations with a foreign entity, to effect de-listings, and take-private transactions, and generally achieve efficient tax structuring of businesses; the ability to use Cayman corporate structures to facilitate tax efficient wealth management and succession planning.

What is the main reason a client would consider using a Cayman Islands exempted company?

The Cayman exempted company is ideal for international finance transactions and/or investments for many reasons, including: incorporation with name written in foreign characters; incorporation within one business day of documents being filed; no requirement for directors or officers to be resident in Cayman; register of shareholders and minute books can be held in another jurisdiction; no requirement for shareholders’ annual general meeting; maximum confidentiality and anonymity – with no requirement to publicly file register of shareholders or accounting information; no taxes on distributions or on capital gains; no withholding taxes on dividend or other distribution; no gift, estate or inheritance taxes; no foreign exchange restrictions.

Gary Smith is a Partner in the Corporate and Investment Funds team at Loeb Smith. He is an expert on Cayman Islands Investment Funds law and has given expert evidence in the Southern District of New York court proceedings relating to Cayman investment funds. He is also author of: “Investment Funds – Cayman Islands”, published in the Practical Law Company Cross-Border Investment Funds Handbook, 2011; “Introduction of Non-Petition… Covenants”, published in International Corporate Rescue Vol. 10 (2013) Issue 4; “Cayman Islands’ Court of Appeal Re-affirms Status of Segregated Portfolio Companies”, published in International Corporate Rescue Vol. 9 (2012) Issue 6; “US Court and Cayman Islands Court: Sharing Jurisdiction in the Interests of Comity”, published in International Corporate Rescue Vol. 12 (2015) Issue 1.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

SOURCE: http://www.hg.org/article.asp?id=35080

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