These companies allow persons to conduct business in the Cayman Islands.  The typical requirement is that at least 60% of the shares must be held by a Caymanian person and that Caymanians must exercise majority control over the board of the company.  The application and registration of a local company can be conducted online through the governments own “Cayman Business Portal” where the company can be incorporated and then applications made for the appropriate Trade and Business Licence.

These are companies that are established under the rules and regulations of Cayman’s Enterprise City.  In a nutshell this is applicable for those seeking to conduct business outside of Cayman but establish presence in Cayman in an expedited and streamlined manner.  Cayman Enterprise City helps facilitate work permits and licenses for members, albeit at a cost.  HLX can assist in establishing the corporate vehicle.

SPCs are special types of companies.  A single SPC is one distinct legal entity but each Segregated Portfolio (SP) underneath the SPC is also legally segregated. This means that assets or liabilities in one SP do not belong to any other.  In a worst case scenario of the collapse of one SP, the assets in all the other SPs should be protected from being used to satisfy any creditors of the collapsed SP.

A segregated portfolio company can have an almost endless supply of SPs, limited, in effect, only be one’s imagination. 

An SPC is slightly more expensive to setup initially than a regular exempt company but economies of scale quickly come into play once you have 3 or more segregated portfolios because at that point you are only paying the government for one SPC. 

An additional advantage of an SPC is the commonality of branding.  Thus one may have

“XYZ Investor Fund SPC” and then a series of investment options underneath such as “Equity Fund”, “Bond Fund”, “Property Fund” thus being able to market each fund under the common umbrella of the SPC. 

Often SPC’s are referred to as umbrella company as there is one umbrella under which multiple portfolios may exist.

SPVs are simply a term used to describe companies that are established for a specific and often narrow purpose.  This may be, for instance, to hold a boat, an aircraft, a property or a piece of art.  An SPV is not a distinct legal vehicle since it is already an Exempt Company but rather just a turn of phrase to represent a company that was established for a special, specific purpose.

Foundations are very common in civil law jurisdictions and often fulfil the role of a charitable or non-profit business making grants or sending funds to good causes.  They are also used a lot in estate planning and asset protection planning as they can serve much the same function that a trust can, but within a corporate framework.  As such they may be very useful for families who wish to plan for asset transfer across generations, or for those looking to establish philanthropic structures with a broad range  of qualified, experienced and competent professionals serving as board members.

Please see our section HLX Family Office for more detail.

A foreign company is an overseas company which has established a Caymanian branch or is undertaking some activity which has a direct connection to the Cayman Islands. This may include an overseas company that is operating through a fixed place of business in Cayman or offering its goods or services via online platforms to Caymanian customers. 

An overseas company is expressly prohibited from holding land in the Cayman Islands unless it has first been registered as a foreign company.

Exempted limited partnerships are very popular structures for private equity structures and mutual funds.

The partnership is structured so that the management of the partnership is undertaken by a general partner for the benefit of one or more limited partners, who do not get involved in the day to day administration of the partnership.

Unlike a company, a partnership is not treated as a separate legal entity and the arrangement is akin to a private contract between each of the general partner and the limited partners which governs how the partnership is to be run and how profits and losses are allocated between the parties. Since the partnership is not a separate legal entity, any actions are taken by the general partner in its own name on behalf of the partnership.

An Exempted Limited Partnership is one which has been formed to conduct business outside of the Cayman Islands and is not permitted to undertake business with the public within Cayman except in further of its offshore business.

Every Exempted Limited Partnership (commonly just referred to as “LP’s” require a General Partner that is responsible for the administration, management and affairs of the partnership.  Such a General Partner is typically a corporate entity since although an individual could serve as a GP there is potentially unlimited liability to a GP for losses of a partnership.

Thus the vast majority of General Partners are set up as Cayman exempt companies and are then comprised of one or two persons serving as directors (who are protected behind the corporate structure from personal liability except in the event of fraud, negligence or similar).

A General Partner needs to be established before a Limited Partnership in order that it can be showed that the Limited Partnership had a General Partner (which is a condition of the Cayman Registrar for approve the registration of a partnership)

A Limited Liability Company ("LLC")  is a hybrid vehicle which combines certain features of companies and partnerships.

Like a company, An LLC has separate legal personality and offers limited liability to its members. However, the key difference from a company is that an LLC offers greater flexibility in its management and organisation, which in particular allows the LLC to determine how it chooses to allocate profits and losses between its members (rather than rigidly dividing this based on the number of shares held). This makes it a popular vehicle for a variety of transactions, including investment funds, private equity deals and joint ventures where a more equitable split of profits and losses may be deemed appropriate.

A private trust company is a trust company that is exclusively for the purpose of serving as trustee to trusts for the same family.  It may not operate as a commercial enterprise insofar as soliciting third party business – meaning that it must only serve as trustee for trusts that are connected to one family.

In all other forms it is identical to a trust company, but because it is not taking third-party funds or clients it is subject to slightly lighter regulatory oversight.

The great advantage of a Private Trust Company lies in what it isn’t.  In a typical trustee relationship one has a bank or large company as trustee and with that potentially dozens or hundreds of people familiar with intimate family financial matters.  This is often desirable simply as a matter of personal privacy.  With a private trust company, the directors of the private trust company and they alone are the persons who will know the specifics of the family’s affairs.  Other persons will have some knowledge in order to satisfy the statutory AML obligations but the cast of persons will be much reduced.   Please see our section HLX Family Office for more detail.

A trust is a common law structure that allows people to disassociate themselves from assets that are theirs and to pass onto a different person under the stewardship of a trustee.  This allows parents, for instance, to establish a trust to pay for the school fees or training expenses of children, safe in the knowledge that those assets are no longer part of the parent’s estate and thus protected in the event of litigation, bankruptcy or similar.  They are incredibly common structures used in lots of very constructive ways.

It is important, when establishing a trust to make sure you talk to a lawyer specialising in wealth planning as there are important tax and liability matters that should be understood before establishing such an entity.