As a recognised global centre of excellence for trusts,
Cayman's financial sector has serviced international clients
for decades with what is the most flexible instrument for wealth
structuring and estate planning within a common law framework.
The Cayman Islands Monetary Authority's (CIMA) regulatory
framework covers a range of licences for the trust sector, allowing
for the provision of trust services to individuals, families and
organisations. An unrestricted Trust Licence authorises the
undertaking of business acting as a trustee, executor or
administrator for private wealth, corporate, collective investment
schemes or charitable structures. There are also categories of
licences for Restricted Trust and Nominee Trust business, which
allow for operating in a specific role only. In addition, CIMA
regulates private trust companies, which are companies established
for the sole purpose of engaging in trust business, effectively as
a corporate trustee to either a trust or a group of
'connected' trusts, usually within the same family and
typically utilised by high net worth families. Finally, there is a
further licence category for trust services involving a Controlled
Subsidiary where there is a desire for a licensed provider to
operate a certain category of clients under a specific entity
without requiring an additional full license.
In addition to traditional wealth planning, Cayman's trust
companies are used extensively in capital markets transactions and
structured finance deals, by major institutional investment
managers, financial institutions and investment banks. Japanese
investors, for example are very familiar and comfortable with
Cayman unit trusts to structure hedge fund investments. As with
other sectors, trust legislation in Cayman has evolved to meet the
rapidly changing needs of the industry. The innovative STAR Trust
regime, developed in 1997, significantly expanded trust planning
capability, providing for trusts to be established for any purpose,
provided it is lawful and not against public policy.
With steady and dependable growth, trusts have remained an
important component of the financial services industry in Cayman,
where there are currently 140 licensed trust companies, confirming
the jurisdiction's status as a leading centre for global wealth
management and planning.
Produced with kind assistance from The Society of Trust and
Estate Practitioners (STEP)
Originally published in Cayman Finance
Magazine, 2015-2016, Issue 2
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
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