What is a Cayman Islands foundation company?

A company with a few extra rules

The Cayman Islands passed the Foundation Companies Law in 2017 (Law 29 of 2017). It came into force on 18 October 2017.⁵ This module uses the Foundation Companies Act (2025 Revision), which was revised as at 31 December 2024 and published on 30 January 2025.⁵ We call it "the Act".

The Act does not build a new kind of body from scratch. It says Cayman's Companies Act applies to a foundation company, with the changes listed in its Schedule 1.⁵ The Cayman General Registry puts it simply: the foundations law "is not a stand-alone statute".⁶

So a foundation company is first of all a company. Under the Companies Act, a company is a body that can do anything a person of full capacity can do, and it has "perpetual succession", which means it carries on even as the people in it change.⁷

The Act defines a foundation company as a company that has been declared one under section 5.¹ When the Registrar is satisfied that the rules are met, the company's certificate of incorporation includes that declaration. The declaration is conclusive evidence that the company is a foundation company.²

The requirements

Section 4 of the Act sets out what a company needs to be a foundation company.³

• It is limited by shares or by guarantee, with or without share capital.³
• Its memorandum says it is a foundation company and describes its objects.³
• Its memorandum says what happens to any spare assets if the company is wound up.³
• Its memorandum bans dividends or other payouts of profits or assets to its members.³
• It has adopted articles.³
• Its secretary is a "qualified person": someone licensed or permitted under the Companies Management Act to provide company management services in Cayman.^3,1

"Limited by guarantee" is a Companies Act idea. Each member promises to pay up to a set amount if the company is wound up.⁷ In the Act's own model memorandum, that amount is one US dollar.⁸ A guarantee company may also have share capital, but it does not have to.^7,3

The words you need

No owners to pay

A normal company exists partly to make money for its shareholders. A foundation company may not pay dividends or other distributions of profits to its members.³ A member can still be paid a reasonable fee for work as a director or officer. The Act says that does not count as a dividend.³

A foundation company can even run with no members at all. If its memorandum allows it and it still has at least one supervisor, its members can leave. That doesn't affect the company's existence, capacity or powers.⁴ If it has no members, it may only admit new ones later if its constitution expressly allows it.⁴

Beneficiaries are not owners either. Unless the constitution says otherwise, a beneficiary has no powers or rights over the company, its management or its assets.¹⁰

New or converted

A foundation company can be formed new. An existing Cayman company can also apply to become one.^2,6 The Companies Act (2026 Revision) also lets a foundation company re-register as an ordinary exempted company by special resolution. It says this does not create a new legal entity.¹¹