The Foundation Companies Law (the "Law”) was passed by the Legislative Assembly in March 2017, and has now been brought fully into effect from 18 October 2017.
As confirmed in our previous update, a foundation company may be established as a new form of Cayman company and will share many of its features with regular exempted Cayman companies, save that it will be prohibited from paying dividends to its members. Foundations will fit seamlessly into Cayman’s legal regime, and offer up an attractive and flexible structuring tool for private clients with offshore interests, regardless of whether they are located in civil law countries or common law jurisdictions. Foundations are also expected to be useful to commercial lawyers in securitization transactions, as an alternative to the traditional special purpose vehicle under a purpose trust.
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