- with Finance and Tax Executives
The Companies (Amendment) Act, 2024 (the "Act") came into force on 1 January 2026, implementing a series of reforms aimed at modernising and streamlining the operation of companies incorporated in the Cayman Islands.
One change of particular note for practitioners and corporate groups is the amendment to section 14 of the Companies Act, which introduces a new, non-court route for reducing share capital. A company may now reduce its share capital by:
- passing a special resolution of shareholders;
- the directors signing a declaration of solvency, confirming that the company will be able to pay its debts as they fall due in the ordinary course of business; and
- delivering the resolution and solvency declaration to the Registrar of Companies.
This removes the requirement for a court application for solvent capital reductions and offers a faster and more cost-effective alternative, while preserving the court sanctioned process where appropriate.
Other amendments now in force include:
- Fractional shares: where permitted by a company's articles, companies may now repurchase or redeem fractional shares, increasing flexibility in share reorganisations and transactional processes.
- Continuation into Cayman: the continuation regime has been expanded to allow foreign companies with limited liability but no share capital in their home jurisdiction to continue into Cayman as exempted companies limited by shares, provided suitable constitutional documents are adopted.
- New conversion routes: limited liability companies and foundation companies may now convert into exempted companies without forming a new legal entity, subject to meeting the statutory requirements and receiving a certificate of re-registration from the Registrar.
- Clarification of "public in the Islands": for exempted companies issuing securities, the Act clarifies that the term excludes exempted companies, foreign registered companies and limited liability companies, providing greater certainty for listings on a local exchange.
- Re-registration as ordinary resident companies: exempted companies may now re-register as ordinary resident companies by special resolution and amendment of their constitutional documents, providing a pathway for companies wishing to establish a domestic operating presence.
These changes are now fully effective and provide companies with enhanced flexibility, simplified procedures and greater certainty when undertaking corporate actions in the Cayman Islands.
Access the full Companies (Amendment) Act, 2024 here, and the Companies (Amendment) Act, 2024 (Commencement) Order, 2025 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.
