CAYMAN ISLANDS Law and Practice Contributed by: Agnes Molnar, Jason Ta, Paul Walters and Gemma Walters, Travers Thorp Alberga
6.4 Construction of Bankruptcy-Remote Transactions See 3.1 Bankruptcy-Remote Transfer of Finan- cial Assets . 6.5 Bankruptcy-Remote SPE See 1.2 Structures Relating to Financial Assets and 6.1 Insolvency Laws .
payment of the minimum fee to the Registrar of Companies). Directors In respect of an SPE incorporated as an exempted company limited by shares, there is a requirement for there to be at least one director appointed at any point in time. In practice, two or three independent directors are often appointed, and often the constitutional documents permit the appointment of a proxy. As a matter of the laws of the Cayman Islands, the directors are not required to be located within the Cayman Islands. However, there may be tax consequenc - es if such directors are located outside of the Cayman Islands. Each director is under a duty to act honestly and in good faith with a view to acting in the best interests of the SPE, regard - less of any other directorship such director may hold. Each director is responsible for advising the board of directors in advance of any potential conflicts of interest. A director of the SPE is not required to own any shares in the SPE in order to qualify as a director. An SPE will generally have no subsidiaries or employees. Shareholders A Cayman Islands-exempted limited company can limit the liability of its members by a declara - tion of the same in the memorandum of associa - tion. Shares of a fixed amount or shares without a nominal value may be issued. Shares may be expressed (and subscribed for) in any currency. Substantive Consolidation Neither the laws of the Cayman Islands nor the laws of England and Wales recognise or provide for a doctrine of substantive consolidation. 6.3 Transfer of Financial Assets See 3.1 Bankruptcy-Remote Transfer of Finan- cial Assets .
7. Tax Laws and Issues 7.1 Transfer Taxes
The Cayman Islands currently has no income, corporation or capital gains tax and no estate duty, inheritance tax or gift tax. The Tax Information Authority, which serves as the competent authority in respect of taxation in the Cayman Islands, does not at present impose transfer taxes in the Cayman Islands in respect of the entry by an SPE into a securitisation trans - action regarding the transfer of receivables from the transferor. In theory, Cayman Islands stamp duty may be payable if any documents are executed in, after execution brought to, or produced before a court There are no taxes on profits imposed in the Cayman Islands at present in respect of the income an SPE earns from the receivables in a securitisation. 7.3 Withholding Taxes There should generally be no withholding tax on cross-border payments received by an SPE under a securitisation. Neither should withhold - ing be required on the payment of interest or principal on the debt securities, nor should gains of the Cayman Islands. 7.2 Taxes on Profit
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