Cayman Island: Asset Protection Strategy

The Cayman Islands is known as one of the best offshore finance centers today.  The island’s jurisdiction over its people, business and foreign relations is considered as one of the more developed compared to other offshore locations for asset protection.  The main attraction for foreign investors, whether company or individual, remains the island’s favorable laws regarding trusts. There are two judicial laws enacted to facilitate opening and maintenance of trusts.  The newer law, which took effect some time in 2001, revised the non-disclosure clause of Cayman trusts that basically allows foreign laws to investigate transfer of assets to the island for the sole purpose of tracking down illegal transfers.  However, the same law still preserves asset protection for its clients.  Although investigation for illegal transfers or fraudulent activities has been allowed, jurisdiction over the validity of the trust itself remains under the Cayman laws. There are two angles to consider with regards to jurisdiction over trusts in the Cayman Islands.  One is from the angle of the creditor, the other from the point of view of the client.  From the creditor’s angle, your trusts are untouchable; and from the viewpoint of the client, opening a Cayman Trust is the more viable option if your main concern is protecting your assets.  For one thing, foreign laws will not be applicable to your trust except on the mentioned investigation of fraudulent activities/transfers.  There is also the other factor of the income on your trusts not being eligible for taxation in the island. Choosing the island as your offshore location for your business and assets will probably be the best decision you will ever make.  Leaving your trusts in the island will not only give you peace of mind, it will also increase your income by a higher rate than in your own country.

 

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