Cayman Islands: Guide To Ship Finance In The Cayman Islands

Last Updated: 12 June 2017
Article by Harneys  

Due diligence

1. How does one demonstrate title to or legal ownership of a vessel registered under the laws of your jurisdiction?

A certificate of registry issued by the Registrar of Shipping (Registrar) at the Cayman Islands Shipping Registry (a Category 1 British Registry) (CISR) demonstrates title to or legal ownership of vessels registered in the Cayman Islands. Upon the transfer of a registered vessel, a bill of sale of a vessel or of shares therein shall be entered in the Register of Ships (Register) in the order of production to the Registrar, and upon the transfer being registered the Registrar shall issue a new certificate of registry.

2. How can one determine whether there are any liens recorded over a vessel?

Mortgage registration is evidenced by a certificate of registry, but because this is a document used for navigation purposes, it is more likely that a copy of the transcript of British Registry will be provided by CISR as evidence of mortgage registration over a vessel.

3. How does one determine whether there are any security agreements, liens, charges or other encumbrances granted by a vessel owner or affiliated party who might be a borrower, guarantor or other credit party in connection with a vessel finance transaction?

Where security is created by a company incorporated in the Cayman Islands and whether or not the asset is situated within the Cayman Islands, it is necessary under section 54 of the Companies Law (2016 Revision) of the Cayman Islands (Companies Law) to enter particulars of such security in the register of mortgages and charges of the company, maintained by the company's registered office provider. Note, failure to register in this way exposes the company and directors to a financial penalty (and may technically result in the company failing to be in good standing under the Companies Law), but does not invalidate the security itself or affect the relevant chargee's priority. Unlike some jurisdictions (eg, England and Wales) there are no statutory time limits within which the registration has to take place to avoid being void against a liquidator or creditor, although it is prudent for lenders to ensure their security is registered as soon as possible so that other potential creditors who search the Register are put on notice. Generally, there is no public registration of security in the Cayman Islands and no publicly searchable registers, so copies of the register of mortgages and charges must be obtained from the company itself or from its registered office provider (with the company's consent). Certain assets such as aircraft, ships and intellectual property h ave statutory registration requirements for security interests granted over them – see question 2.

4. Can one determine whether an obligor registered in your jurisdiction is duly organised and in good standing from a search of a public registry?

A search at the Cayman Online Registry Information Service of the General Registry of the Cayman Islands (available to registered users only) (Companies Registry) will show whether an entity is in existence in the Cayman Islands, when it was incorporated and who is acting as the company's registered office provider. To establish whether a Cayman entity is in good standing, a request must be made to the entity's registered office provider to order a certificate of good standing from the Registrar of Companies in the Cayman Islands. There are two elements to good standing in the Cayman Islands:

  • all fees and penalties under the Companies Law must have been paid
  • the Registrar of Companies must have no knowledge that the company is in default under the Companies Law

5. Can the shareholders or other equity interest holders, directors and officers or other authorised signatories of an obligor organised in your jurisdiction be determined from a search of a public registry? If not, how are these parties customarily identified?

Information on shareholders, directors, officers and authorised signatories of a Cayman Islands entity is not available publicly in the Cayman Islands. To obtain this information, a request must be made to the company (or its registered office provider acting on the instructions of the company) to provide a copy of the company's register of members and register of directors and officers. Authorised signatories are generally approved by a company in the resolutions of the board of directors approving a specific transaction.

6. What corporate or other entity action is necessary for an obligor to enter into or guarantee a debt obligation? When is action by the board of directors or other governing body required? Must shareholders approve a guarantee?

Subject to any specific requirements under the Cayman obligor's articles of association, generally the board of directors of a Cayman entity would need to approve the obligor's entry into a written guarantee by passing a resolution of the board of directors. There is no prohibition against a Cayman Islands company providing financial assistance under Cayman Islands law. The directors of a company providing a guarantee or a security interest must ensure that any proposed transaction is in the best interests of the company as a whole and that, in entering into the guarantee, they take due account of their other fiduciary duties. A guarantee or other security arrangement may be construed as not being in the best interests of a company if the granting company receives no commercial benefit from the underlying financing arrangements. If the transaction is not deemed by the directors of the company to be in the best interests of the company or where the guarantee or security interest is upstream (subsidiary to parent) or cross-stream (to an affiliate), secured parties may also seek the approval of the security grantor's shareholders before entering into the transaction – this should avoid the validity of the transaction subsequently being challenged by a shareholder and gives comfort to the directors committing the company to the transaction.

7. Must foreign lenders qualify to do business in your jurisdiction to extend credit to a borrower organised in your jurisdiction? Will foreign creditors be deemed resident as a consequence of making a loan or other extension of credit to an obligor within your jurisdiction?

Under the laws of the Cayman Islands, foreign lenders will not be deemed to be resident, domiciled or carrying on any commercial activity in the Cayman Islands or subject to any tax in the Cayman Islands by reason only of the extension of credit to a borrower incorporated or formed within the Cayman Islands, nor is it necessary for a foreign lender to be authorised or qualified to carry on business in the Cayman Islands to extend credit to a borrower incorporated or formed within the Cayman Islands.


8. Is central bank or other regulatory approval required for repayment of a loan in foreign currency?

No authorisations, consents, orders, permissions or approvals are required from any governmental, regulatory or judicial authority or agency in the Cayman Islands for repayment of a loan in foreign currency.

9. Do usury laws limit the interest payable to a lender in respect of a vessel financing?

There is no applicable usury or interest limitation law in the Cayman Islands that would restrict the recovery of interest payments to a lender in respect of a vessel financing.

10. Are withholding taxes payable on principal or interest payments to non-resident lenders?

There are no withholding taxes payable under Cayman Islands law on principal or interest payments to non-resident lenders.

Registration of vessels

11. What vessels are eligible for registration under the flag of your country? Are offshore drilling rigs or mobile offshore drilling units considered vessels under the laws of your jurisdiction? What is the effect of registration?

Vessels of all sizes and classes, from small yachts to supertankers, and including offshore drilling rigs and mobile offshore drilling units, are eligible for registration in the Cayman Islands. However, as a matter of policy, fishing vessels are not currently being registered except those owned locally and operating in Cayman waters. CISR offers five vessel registration options:

  • full
  • interim
  • provisional
  • under construction
  • demise (bareboat) charter

Prior to accepting any commercial vessel for registration, the CISR uses a 'merchant ship flag-in matrix' scoring system to ensure the vessel meets minimum safety and operational standards. The matrix examines a vessel's port state control record, age and type of vessel, classification society and previous flag. Generally, vessels over 15 years old or vessels with a medium to high score may require a preregistration survey.

The effect of registration in the Cayman Islands with CISR is that the port of registry of the ship shall be one of the following ports: George Town, the Creek or Bloody Bay. In addition, a vessel registered in the Cayman Islands is a 'British ship' and is entitled to fly the red ensign flag and, as British ships, come under the protection of the British Royal Navy. Full British consular services and Royal Naval assistance and protection for Cayman-flagged vessels are available worldwide.

To view the full article please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions