A Cayman Islands trust is a legal vehicle used for holding assets that can be structured to fit a series of investments or personal needs, all while allowing for a convenient manner of managing the assets placed therein. Our team assists investors who set up a Cayman Islands company and we also provide solutions for those interested in opening a trust. This will allow them to maintain a flexible solution for asset management and protection.
| Quick Facts | |
|---|---|
| Relevant laws | The Trust Law in the Cayman Islands, and the Special Trusts (Alternative Regime) Law |
|
Restrictions |
No restrictions apply to the accumulation of income. |
|
Manner of setting up a trust in the Cayman Islands |
Through a trust deed |
| Trust deed type | It can be drawn up to allow for fixed or discretionary interest. |
| Where is the trust registered |
With the Registrar of Trusts |
| Taxes on Cayman Islands trusts |
Not applicable |
| Types of trusts |
Exempted trusts, special trusts (under the Alternative Regime Law) |
| Trust registration fee |
CI$ 500 |
| Trust annual fee in the Cayman Islands |
CI$ 500 |
| Trust founders | The settlor (there are no restrictions on nationality), he/she can also be a beneficiary. |
| Settlor powers |
In some cases, a settlor can also act as a co-trustee. |
| Trustee |
The individual (or company) entrusted with administering the trust. |
| Trust beneficiaries |
The individual(s) who will benefit from the assets included in the Cayman Islands trust. |
| Cayman Islands trust advantages |
Highly flexible, exempt from the rules against perpetuities (in some cases), no taxes for trusts. |
| Assistance for trust creation | Our Cayman Islands company formation specialists provide complete assistance for the registration of trusts. |
Table of Contents
The uses of a trust in the Cayman Islands
As a legal vehicle, a trust has a simpler setup process, when compared to the general procedure for company formation in the Cayman Islands. Some of the common purposes of a trust include the following:
- asset management and protection;
- estate planning;
- the preservation of wealth;
- commercial uses.
The parties to a Cayman Islands trust are the following:
- The settlor: the individual who creates the trust and owns the assets; he may if he chooses to, retain a certain level of control;
- The trustee: the party invested with the power to administer the trust and distribute the assets according to the wishes of the settlor; there is no legal requirement for the trustee to be a Cayman Islands resident;
- The beneficiary: a trust can have one or more beneficiaries, the persons entitled to receive the funds of the trust.
The trust is set up by concluding a trust deed, which clearly sets out the terms of administration and distribution of assets.
Types of trusts in the Cayman Islands
Before deciding to open a Cayman Islands trust, investors should understand the most common forms. Our team highlights these below:
- fixed interest trusts;
- accumulation and maintenance trust;
- discretionary trust;
- revocable trust;
- charitable trust;
- “STAR” trusts (please see below).
The Cayman Islands General Registry keeps a Trusts Register for the following types of trusts:
- exempted trusts.
- special trusts under the Alternative Regime Law (STAR).
The Special Trusts Law (the Alternative Regime or STAR) complements the existing Cayman Islands trust law and it was designed to respond to the in-demand non-charitable trusts. Under the STAR regime, trusts can be created for any purpose, as long as they are used for lawful purposes and do not contravene to public policy.
Some of the special features of a STAR Cayman Islands trust are its high level of flexibility and the exemption from the rule against perpetuity. Enforcers are designated for this type of trust.
Our team can give you more information on particular issues addressed in the Cayman Islands trust law.
When looking for legal advice and solutions for your business and individual matters in the Cayman, our local legal experts can answer your questions and offer adequate and efficient solutions. We also assist clients who have questions concerning other important legal issues, such as immigration to the Cayman Islands.
Essential compliance for a Cayman trust
The general requirements for trust creation in the Cayman Islands allow for a significant level of flexibility, as well as privacy in many cases. However, a trust needs to comply with the registration fees, as well as the annual fees set forth by the Cayman Islands General Registry.
Below, our team lists some of the most important fees applicable to a Cayman trust:
- a $500 registration fee;
- the annual trust fee of $500;
- a $75 filing fee;
- trust certificate for $125;
- express registration is possible for a fee of $400.
Please note that the fees above are in Cayman Islands Dollars, and they can be subject to change. Our team provides complete assistance for the set up of trusts, as well as for company incorporation in the Cayman Islands. You can confidently reach out to us as soon as you decide to set up a trust or open a company.
Contact our team for complete assistance with the creation of a Cayman trust. You can rely on our expert solutions for all matters concerning trust formation, as well as for Cayman Islands company formation.