CAYMAN ISLANDS Law and Practice Contributed by: Shari Seymour, Kerry Ann Phillips and Michael Lockwood, Maples Group
2.4 Antitrust Regulations The Cayman Islands does not have any antitrust leg - islation applicable to M&A transactions involving Cay - man Islands entities. 2.5 Labour Law Regulations The majority of M&A transactions in the Cayman Islands involve entities that do not have employees in the Cayman Islands and are not conducting business in the Islands. Consequently, the legislation applica - ble to labour law matters is often not relevant to M&A transactions. Labour laws in the Cayman Islands include: • the Labour Act (As Revised); • the Health Insurance Act (As Revised); • the National Pensions Act (As Revised); • the Workmen’s Compensation Act (As Revised); and • any ancillary regulations thereto. These laws establish minimum employment stand - ards, but do not preclude an employer from setting conditions that are above the minimum. The Companies Act also provides that, subject to any specific arrangements entered into by the parties to a statutory merger, following the merger a surviving Cayman Islands company will be liable for all con - tracts, obligations, claims, debts and liabilities of each constituent company, which would invariably include all employment/labour-related contracts, obligations, claims, debts and liabilities. 2.6 National Security Review There is no national security review of acquisitions in the Cayman Islands. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments The most significant M&A-related legal development in the Cayman Islands in recent years has been the substantial and sustained growth in merger appraisal litigation.
of the remaining shares in the company and thereby become the sole shareholder of the company. 2.2 Primary Regulators The primary sources of Cayman Islands law relevant to M&A transactions are the Companies Act, the LLC Act and common law; see 2.1 Acquiring a Company . There are no specific statutes or government regu - lations concerning M&A transactions in the Cayman Islands. However, if the target company’s securities are listed on the Cayman Islands Stock Exchange (CSX), the CSX Code on Takeovers and Mergers and Rules Gov - erning Substantial Acquisitions of Shares (the “Code”) may apply. Such rules exist principally to ensure the fair and equal treatment of all shareholders. In addition, there are change-of-control rules applica - ble to entities that are regulated by: • the Cayman Islands Monetary Authority (the “Authority”) under: (a) the Banks and Trust Companies Act (As Revised); (b) the Insurance Act (As Revised); and (c) the Mutual Funds Act (As Revised), with re - spect to licensed mutual fund administrators; and • the Information and Communications Technology Authority under the Information and Communica - tions Technology Act (As Revised). 2.3 Restrictions on Foreign Investments There are no restrictions on foreign investment in the Cayman Islands. However, a company conducting certain business locally in the Cayman Islands must be structured so as to comply with local licensing laws, including with respect to ownership and control. The main such requirement is to be licensed under the Trade and Business Licensing Act (As Revised), and the company must be beneficially owned and con - trolled at least 60% by persons of Caymanian Status, or must hold a licence under the Local Companies (Control) Act (As Revised).
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