CAYMAN ISLANDS Law and Practice Contributed by: Shari Seymour, Kerry Ann Phillips and Michael Lockwood, Maples Group
(a) the Banks and Trust Companies Act (As Revised); (b) the Insurance Act (As Revised); and (c) the Mutual Funds Act (As Revised), with respect to licensed mutual fund adminis - trators; and • the Information and Communications Tech - nology Authority under the Information and Communications Technology Act (As Revised). 2.3 Restrictions on Foreign Investments There are no restrictions on foreign investment in the Cayman Islands. However, a company con - ducting 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 controlled at least 60% by persons of Caymanian Status, or must hold a licence under the Local Companies (Control) Act (As Revised). 2.4 Antitrust Regulations The Cayman Islands does not have any anti - trust legislation applicable to M&A transactions The majority of M&A transactions in the Cayman Islands involve entities that do not have employ - ees in the Cayman Islands and are not conduct - ing business in the Islands. Consequently, the legislation applicable to labour law matters is often not relevant to M&A transactions. Labour laws in the Cayman Islands include: • the Labour Act (As Revised); involving Cayman Islands entities. 2.5 Labour Law Regulations
• 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 standards, 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 merg - er a surviving Cayman Islands company will be liable for all contracts, 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 acquisi - tions in the Cayman Islands. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments The most significant M&A-related legal devel - opment in the Cayman Islands in recent years has been the substantial and sustained growth in merger appraisal litigation. Under Section 238 of the Companies Act (which is broadly similar although not identical to its State of Delaware counterpart), a shareholder that is dissatisfied with a merger may seek to have the fair value of their shares determined by the Cayman Islands Grand Court; they are then entitled to a cash payment in that amount (potentially with interest at “fair” rate to be deter-
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