mARCH 2012 46 Legal Expert Board
www.lawyer-monthly.com
Offshore Companies Cayman Islands
Taking a look at the Cayman Islands as part of Lawyer Monthly’s Legal Expert Board focus on Offshore Vehicles, we speak to Julian Ashworth, partner in the Investment Funds Group with walkers in the Cayman Islands. Here, he discusses with us the benefits of offshore vehicles domiciled in the Cayman Islands.
The Cayman Islands remains a pre-eminent jurisdiction given it is tax neutral, has a stable political system as an overseas dependency of the United Kingdom, a robust regulatory system, deep and sophisticated infrastructure of professionals servicing the financial services sector and a commercially focused common law regime with ultimate recourse to the Privy Council in England as the jurisdiction's highest appellate court.
Q The Cayman Islands also continues to
evolve as the jurisdiction responds to changes in the marketplace, regulatory requirements, changes in clients' needs, as well competitive challenges from existing and new financial centres. We expect that Cayman's legislative and regulatory framework will continue to adapt to meet these demands. By way of example, Cayman is looking to introduce a Cayman limited liability company similar in form and structure to the Delaware limited liability company vehicle which is anticipated to be attractive to both sponsors and investors.
Q
How do offshore vehicles help your clients achieve their objectives?
In a world that is increasingly global and interconnected, Cayman Islands' vehicles provide the ability to facilitate effective investment and structure and manage entities with numerous investors and multiple layers of debt and equity in an efficient and effective manner.
For example, by imposing a Cayman Islands' exempted company as the holding
why the Cayman Islands?
company in a corporate structure, it is possible to create a level of sophistication that affords shareholders the ability to determine for themselves how business will be conducted and availing investors of the various benefits which Cayman offers.
Taking a wider view, vehicles formed in
international financial centres such as the Cayman Islands have been very effective in facilitating inward and outward investment in emerging and developed markets alike. Investors are generally very familiar and comfortable with Cayman Islands' structures and independent research has indicated that jurisdictions like the Cayman Islands have a positive impact on global economic activity and growth opportunities.
Q
Are there any limitations on the objectives for which a Cayman vehicle may be formed?
The vast majority of Cayman-domiciled funds and investment vehicles are organised as exempted companies or exempted limited partnerships. Both types of vehicle may be formed for any lawful purpose and, as such, there are no impediments to the objectives which such vehicles may pursue.
There is currently no direct corporate
taxation in the Cayman Islands. In addition, exempted companies and exempted limited partnerships may also benefit from tax exemption certificates with effect that for a set period from the date of issue (initially being 20 and 50 years respectively), no law thereafter enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciations shall apply to the vehicle or investors in respect of that vehicle and products.
Julian Ashworth - Partner WALKERS
Tel: +1 345 914 6360 Email:
julian.ashworth@
walkersglobal.com Website:
www.walkersglobal.com
Q
what predictions do you have in connection with the ongoing use of offshore vehicles?
As a firm, we have seen an increased demand for Cayman and other offshore-domiciled products. We expect this demand to continue particularly with respect to established jurisdictions such as the Cayman Islands which have been willing to embrace the requirements of evolving onshore regulatory regimes, maintain robust and transparent regulatory standards and which are willing to evolve to meet the demands of both emerging and more traditional markets. LM
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