The Cayman Islands are one of the most important offshore jurisdictions in the world, a British Overseas Territory in the Caribbean that has been a centre for international wealth structures, hedge funds and foundations for decades. No income tax, no capital gains tax, no inheritance tax, and a robust common law legal system that protects private property and freedom of contract.
Why the Cayman Islands for asset protection?
The Cayman Islands offer one of the most carefully designed legal systems for asset protection structures outside the EU. The STAR trust law (Special Trusts, Alternative Regime) allows trusts to be set up with far-reaching protection against creditors, the consequences of divorce and state intervention. On top of this comes a modern foundation law that allows highly flexible offshore foundations. The islands are not a member of the EU and are subject to no European directive on asset transparency, a decisive advantage for people who want to position their wealth structure outside the reach of the EU.
The tax framework
The Cayman Islands levy no direct taxes: no income tax, no corporation tax, no capital gains tax, no inheritance tax and no wealth tax. Non-residents who hold structures in the Caymans have no local tax liability. However, the beneficiary's tax residence in their home country remains decisive, so professional structuring is essential.
Practical uses
Cayman structures are typically used for: protecting investment assets from creditors and the consequences of divorce, holding international shareholdings and funds, passing wealth across generations through trusts and foundations, and as the basis for family office structures with several beneficiaries. For our clients from Europe, we recommend combining it with a European holding structure to ensure tax transparency.
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