The Broadening Appeal of Cayman Islands’ Foundation Companies

For the best part of a decade, the Cayman Islands foundation company has provided a highly flexible and efficient structuring option for corporate leaders and wealthy families around the world.

While initially observed as a relatively niche product, the adaptability of foundation companies – which has been proven across multiple applications – has moved the vehicle into the mainstream.

Building on Cayman’s long history in trusts as a sophisticated, stable and flexible jurisdiction for international wealth management, foundations have become the next chapter in the story. As a greater understanding of the unique characteristics of foundations has emerged, more people in an increasing number of domiciles are taking advantage of their benefits. In addition to the well-documented use in the crypto space as not-for-profit decentralised autonomous organisations (“DAOs”), it is noteworthy that Cayman foundations have grown in popularity as a straightforward alternative to what historically would have automatically been resolved with a trust. The use of Cayman foundations as quasi trust structures has been more apparent in jurisdictions where there is a familiarity and understanding of the tax outcome from foundation companies, such as in the US, Middle East and Asia.

Efficient Bespoke Structures

For succession and estate planning purposes, business founders welcome the flexibility within foundation companies that allow bespoke structures to be established specific to their particular circumstances, which may include restricting information regarding the foundation and its assets to certain beneficiaries. While real assets such as art, yachts and planes have been synonymous with trusts over the years, foundation structures can be even more appealing with the ability for the founder to maintain sufficient control over the property, whether that is for asset preservation or other reasons. Furthermore, foundations can be set up on a broader basis for philanthropic purposes as well.

Families have traditionally enjoyed the benefits of a private trust company (“PTC”) as a mechanism to maintain family control over family businesses and affairs. While this may be achieved perfectly well through a PTC, the foundation company permits greater flexibility in terms of the roles, rights and positions of family members as well as the option to cease members and ownership. It should also be noted that a foundation company may act as a Registered PTC without the need for a purpose trust holding the shares of the PTC.

Foundations may be a more suitable vehicle for unusual assets than trusts where many traditional trustees might balk at the insurability or potential risks of such assets. Foundations also remain suitable for complex investment portfolios and can be established for the benefit of individuals and their families, or for example, to establish an investment policy generating income for charitable or other pre-defined purposes. Foundations can be an excellent and flexible orphan vehicle for investment structures as they do not require members, shareholders or beneficiaries.

Essentially, it is the proven versatility of the foundation vehicle which has captured the attention and imagination of international clients and their advisors, with the ability to efficiently create a completely bespoke structure from a blank canvas, both in terms of the assets held and the rights attributed to various parties. This stands in contrast to a traditional trust, which will always contain a hefty, if known, weight of default provisions right from the outset.

Cayman Foundations – In Focus

A foundation can be formed for any object, providing its activities are legal and not counter to public policy, regardless of its benefits to other persons. Unlike a trust, which is not a legal entity, the foundation company has legal personality that is distinct from its founder, members, directors, officers and supervisors. This means that the entity is able to trade and transact in its own name. The foundation can continue in perpetuity in similar manner to a Cayman Islands STAR (“Special Trust Alternative Regime”) trust, while its flexibility extends from its objects through to management and supervision. They also enjoy the benefits of the Cayman firewall protections ensuring against unreasonable interference in their administration from foreign courts.

The registered office of a foundation company must be the business address of its secretary who must approve any assets before they can enter the foundation. The role of the secretary is critical from an AML perspective and such person must be permitted or licensed by the Companies Management Act (2025 Revision) to provide company management services in the Cayman Islands. Subject to criminal sanctions, the secretary is required to certify that no regulatory obstruction under the Proceeds of Crime Act (2025 Revision), the Terrorism Act (2018 Revision) and the Anti-Money Laundering Regulations (2025 Revision) exists to the acceptance of any contribution of assets to the foundation company, as well as maintain full and proper records of all actions and enquiries made in relation to the acceptance of assets. This act of identifying assets and ensuring adherence to the Cayman Islands’ regulatory framework must be completed and documented by the secretary for every asset entering the foundation.

The Maples Group in the Cayman Islands provides suitably experienced and qualified individuals to perform the role of secretary and to act as directors to the foundation. In addition to our legal expertise, advising private businesses, individual private clients, family offices and institutional trustees on all manner of wealth management and private client structures, the Maples Group provides a complete suite of specialist trust and fiduciary services, operating across a broad global network in all markets and time zones our clients need us. If you have any questions about foundations in the Cayman Islands or any aspect of the matters discussed, please reach out to one of the authors or your usual Maples Group contact.

For legal and regulatory disclosures please visit: maples.com/legal-notices.