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Effective 1 January 2026, amendments to the Companies Act will come into force, further enhancing Cayman's competitive edge as an international financial services market. Here are the key changes:
- Reduction of share capital: For solvent companies, share capital reductions without court approval will be permitted by special resolutions supported by a directors' solvency statement.
- Fractional shares: The amendments will permit for a simplified, one-way process where a company can pay shareholders in cash for the "fair value" of their fractional shares to ensure they are left with whole shares. The redemption must be authorised by the company's articles of association.
- Conversion and Re-registration: The amendments also introduce conversion options for Cayman LLCs and foundation companies to convert into exempted companies, enhancing flexibility for IPOs and restructurings. Overall, the reforms streamline corporate actions, broaden inbound mobility, and increase entity-type adaptability. Further, exempted companies now gain a pathway to re‑register as ordinary resident companies, enabling local business subject to existing licensing and ownership rules.
- Continuation by bodies corporate: Foreign bodies corporate with limited liability—whether or not they have a share capital—can continue into Cayman Islands as exempted companies limited by shares. This removes the legacy share‑capital restriction, simplifies re‑domiciliations, and enhances structuring flexibility for cross‑border reorganisations and investments.
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.
