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Fiduciary Services in Cayman Islands

Fiduciary Services in Cayman Islands

When setting up a Cayman Islands exempted company, it is a beneficial step to consider fiduciary services. This involves the management of assets on behalf of another individual or a corporation. Those who provide these services are bound by a fiduciary agreement and adhere to high standards of performance, always acting in the best interests of the beneficiary whose assets are managed. Fiduciary services encompass private trust services, private banking, and wealth management.

Advantages of fiduciary services in Cayman Islands

Our team of Cayman Islands incorporation agents provides a wide range of fiduciary services that meet the needs of international investors. Starting with company management, and trust administration, our agents are able to handle matters to the best interest of our clients.

The Cayman Islands are a favorable location to open a trust as well as engage in different offshore activities. The lack of local taxes as well as the easy company and trust formation principles make it convenient for many foreign entrepreneurs to incorporate here.

When doing business in the Cayman Islands, investors are however required to observe the Companies Law. When taking over the business activities or the management of a trust on behalf of a client under a fiduciary duty, our Cayman Islands company formation specialists do so with careful consideration about the laws in force and by observing all of the mandatory requirements that apply to particular cases.

Our team provides complete fiduciary services, as well as assistance to all local and foreign investors who wish to set up a Cayman Islands company. The incorporation procedure is a fairly straightforward one, with investors also benefiting from light regulatory requirements for the offshore company. With our assistance and representation (as needed) you can easily set up a business here.

Types of fiduciary services in the Cayman Islands

Fiduciary duties arise in a number of commonly used business services. Our Cayman Islands incorporation agents list some of these below. Please keep in mind that these are general examples of a fiduciary service and they can be tailored to the needs of the client in the Cayman Islands.

  • Company management: an individual or a corporation who is entrusted under a fiduciary agreement to handle the management of an offshore company in the Cayman Islands; this service can be provided by our local team;
  • Trust administration: a trust includes a beneficiary and the fiduciary trustee, the party entitled to manage the trust’s assets in the best interest of the beneficiary;
  • Nominee director/shareholder: investors who request these two services when setting up a Cayman Islands company will effectively enter into a fiduciary relationship between the appointed nominee and the beneficial owner;
  • Investment fiduciary: an individual or a corporation that is appointed to handle the management of another’s money and/or assets; examples include a banker or professional financial services provider, along with others.

Other examples of fiduciary relationships are between an executor and a legatee in specific cases such as special transactions like the transfer of property rights. The same relationship also exists between the legal guardian and the minor for whom he undertakes legal guardianship.

Main fiduciary duties

As seen above, the fiduciary relationship is based on the transfer of power from one party to another, for the purpose of a specific act or for a longer period and for different purposes. It is thus important to note that any fiduciary services in the Cayman Islands need to be based on the optimal performance of the trustee. The beneficiary needs to trust the appointed agent that he will engage in his duties accordingly and without prejudice. The situation in which the trustee may not have the beneficiary’s best interest in mind is often referred to as fiduciary risk. This is the reason why it is recommended to only entrust parties or companies that have been previously checked. Our team that offers services for Cayman Islands company formation along with different fiduciary services can ensure that the fiduciaries work accordingly.

The main duties of a fiduciary can be summarized in the following way:

  1. Duty of care: this refers to the fiduciary’s attention to decision making as well as his obligation to ensure the well-being of the company or of the other party, as applicable;
  2. Acting in good faith: choosing the option that, in his opinion and expertise, will bring the most benefit to the party he represents;
  3. Loyalty: putting the interests of the beneficial owner above his own; refraining from personal dealings while serving as fiduciary;
  4. Compliance: in his dealings, the fiduciary will comply with all of the laws in force, as required. 

Breach of fiduciary duty can represent the grounds for liability in front of an adequate court. One of our Cayman Islands incorporation agents can provide more details on liability. 

Trust operations in the Cayman Islands

Trust law in the Cayman Islands is based on English statute and common law principles, complemented by local legislation. Cayman trust law offers flexibility and innovation, allowing settlors to reserve powers to meet various objectives related to asset protection, estate planning, or tax mitigation while maintaining the trust’s integrity. Our specialist can assist with trust incorporation in Cayman Islands.

Trustees have a fiduciary duty to oversee trust assets in the best interests of the beneficiaries. Fiduciary services in Cayman Island encompass a broader range of responsibilities, which can include managing companies, assets, or financial transactions while upholding fiduciary duties.

Trusts, especially discretionary trusts and asset-protection trusts, are commonly used for the purpose of protecting assets and managing them in a way that aligns with the beneficiary’s or settlor’s objectives. Fiduciary services involve asset protection efforts for businesses and individuals.

Individuals interested in setting up a Cayman Islands company or a trust are advised to seek our specialists. Whether it’s protecting family wealth through a trust or managing a company’s financial affairs through fiduciary services, our focus is on serving your best interests.

Cayman Islands investment funds

Our team provides fiduciary services in Cayman Islands by guiding individuals through the complex legal and regulatory requirements associated with fund management.

The most common type of investment funds in the country are open-ended and closed-ended funds. Compliance with regulations and the oversight of fund operations are part of our fiduciary services.

There are also different business structures for investment funds, such as a limited partnership or exempted company in Cayman Islands. Choosing the appropriate structure is a significant part of fiduciary services because it requires careful consideration of legal, financial, and tax implications to serve the appropriate interests.

Why choose fiduciary services in Cayman Islands

Choosing fiduciary services in Cayman Islands can offer several advantages for individuals and businesses looking to manage and protect their assets, facilitate financial transactions, and achieve specific financial objectives.

Opening a company in Cayman Islands, as well as other entities, is straightforward and efficient. The jurisdiction is known for its business-friendly environment and streamlined administrative processes. Cayman Islands is home to numerous wealth management and family office service providers, offering comprehensive solutions for high-net-worth individuals and families.

Trusts established in the Cayman Islands can shield assets from potential creditors, legal claims, and forced heirship rules, making it an attractive jurisdiction for asset protection.

The country is also known for its tax-friendly environment, including no direct taxation on individuals or corporations. This can be particularly advantageous for high-net-worth individuals, international businesses, and investment funds seeking to optimize their tax positions. The Cayman Islands has a well-regulated financial sector that provides confidence to investors and clients. The Cayman Islands Monetary Authority (CIMA) oversees financial services providers, ensuring compliance with international standards. Individuals can also hold assets in multiple currencies, making it easier to manage international investments and financial transactions.

Additionally, these statistics regarding company incorporation in Cayman Islands, the number of trusts established and the number of mutual funds prove how valuable fiduciary services are in such situations:

  • Over 11,000 companies were registered in Cayman Islands in 2022;
  • In 2021, the number was even higher, with 16,748 companies registered;
  • 94 trusts were added in 2022;
  • 12,995 mutual funds were established in 2022, according to CIMA.

Contact us for more information on setting up a Cayman Islands company as well as details about the fiduciary services we are able to provide.