CAYMAN ISLANDS Law and Practice Contributed by: Norman Klein and Adam Johnson, Appleby
4.6 Agreements With Local or Governmental Authorities
Because the Cayman Islands is a non-direct taxation jurisdiction and real estate activities can be achieved through different structures, foreign investors are able to select their invest - ment model based on factors not driven by Cayman regulation (eg, taxation and investment regulation), except where participation may be marketed in the Cayman Islands. The choice of investment vehicle will also often be influenced by whether the investor also intends to carry on business within the Cayman Islands, as there is a local business licensing regime in the jurisdiction. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity A Cayman Islands company’s constitutional doc - uments will set out its governance framework, including the powers of its board of directors, who ordinarily manage the day-to-day opera - tion of the business. In relation to a company incorporated as a company limited by shares, the liability of its shareholders is limited to the amount (if any) unpaid on their shares. 5.3 REITs REITs and real estate derivatives from Cayman Islands real estate are quite uncommon due to the relatively small size of the jurisdiction and the taxable event that arises when an interest in land (including the equity capital of a land-hold - ing corporation) is transferred (see 2.10 Taxes Applicable to a Transaction ), although there have been a few occurrences of foreign REITs acquiring Cayman Islands commercial property and at least one occurrence of a domestic REIT that is in the process of being formed. Institutional investment in the Cayman Islands is increasing as the sizes of projects require large
Planning permission may be granted subject to such conditions as the relevant authority sees fit. A prudent developer would engage with utility suppliers at the outset of a project to incorporate their input into their plans. Planning permission runs with the land, although any agreements will be personal to the parties. 4.7 Enforcement of Restrictions on Development and Designated Use Where any development of land (including mate - rial changes in use) has been carried out with - out the applicable planning permission or not in compliance with any conditions attached to a grant of planning permission, the Director of Planning may serve an enforcement notice on the owner or occupier of the land within five years of the alleged breach. Non-compliance with an enforcement notice is an offence and attracts a fine. If the steps required to be taken by the enforce - ment notice are not carried out within the allotted period, the Director of Planning may enter on the land and take those steps, and may recover their costs as a debt from the owner of the land. The Director of Planning may also apply to the Grand Court for an injunction. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets The structures most commonly used to acquire real estate are corporate structures, including Cayman Islands companies and foreign com - panies.
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