CAYMAN ISLANDS Trends and Developments Contributed by: Jason Allison, Christopher Brett Young, James Murrie and Michael Beck, Walkers
Walkers Global 190 Elgin Avenue George Town Grand Cayman KY1- 9001 Cayman Islands Tel: +1 345 949 0100 Fax: +1 345 949 7886
Email: info@walkersglobal.com Web: www.walkersglobal.com
Introduction Throughout 2025, the Cayman Islands continued to cement its position as the premier offshore financial centre, ranking as the top offshore jurisdiction for investment funds and seeing an increasing share of global cross-border corporate transactions, including M&As and initial public offerings. A number of factors contributed to these trends, including proactive legislative reforms, a well-estab - lished judiciary, steady repeat deals and stabilising macroeconomic factors. Cayman Islands-domiciled special purpose acquisition companies (SPACs) have seen a resurgence, with approximately 95% of all new SPACs being formed in the jurisdiction. Other notable transactions include corporate restructurings, joint ventures, and venture capital and series financ - ing deals. Key Drivers of Deal Activity The resurgence in deal flow during 2025 was not spread consistently across the board. Much of the M&A activity involving the Cayman Islands was largely concentrated in specific, high-growth and structur - ally complex sectors in which offshore vehicles, par - ticularly those registered in the Cayman Islands, are considered to offer distinct advantages. The rapid pace of development in artificial intelligence (AI) and a continued focus on Web3-related busi - ness fuelled demand for AI-focused venture capital and series financing transactions, as well as several Web3 mega acquisitions. Cayman Islands exempted companies remained the preferred offshore vehicle for
start-ups operating in tech hubs across the Americas and Asia. The flexibility afforded by the corporate law enabling the creation of complex share class struc - tures (essential for accommodating varying economic rights), bespoke liquidation preferences and anti-dilu - tion protections, as often required by venture capi - talists in early-to-late-stage AI financing rounds and other Web3-related ventures, played a prominent role. There was also an increase in reinsurance-focused M&A, which appears to have been supported by inno - vative new structures pioneered by hedge funds and alternative asset managers. Alternative investment fund managers are increasingly acquiring or sponsor - ing reinsurance vehicles to secure permanent capital bases and leverage float. In response, the Cayman Islands and its key service providers have purposely positioned the jurisdiction to capture this market by promoting a well-established and dynamic regulatory framework available in the jurisdiction for both the asset management and insurance industries. A key aim of this initiative is to promote seamless integration between the investment management arm and the reinsurance operations, driving significant consolida - tion and capital-raising transactions. Cayman Islands structures are increasingly expected to be used in connection with these industries in future. Despite fluctuations and at times inconsistent levels of confidence experienced in the public markets, Cay - man Islands exempted companies remain a preferred vehicle for SPACs and traditional initial public offerings on major US security exchanges, including the New York Stock Exchange and Nasdaq. As noted above,
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