CAYMAN ISLANDS Trends and Developments Contributed by: Christopher Brett Young, Andrew Barker, Hugh Anderson and Sam Francis, Walkers
intended to provide greater flexibility and utility in a number of important areas of corporate law. Such amendments include the following key changes. • Reduction of share capital – under the exist - ing law, in order to reduce share capital, the members of a Cayman Islands company must pass a special resolution and obtain court approval. The Amendment Act will allow for the Companies Act to establish a new proce - dure for an “out-of-court” reduction of capital, noting that the court-sanctioned reduction of capital will remain in place. This new “out-of- court” procedure will permit a company to reduce its share capital by special resolution, provided that the directors of the company deliver a supporting solvency statement to the Registrar of Companies of the Cayman Islands ( “Registrar” ). It is anticipated that this procedure will provide further flexibility to effect corporate transactions in the Cay - man Islands, particularly where a reduction of capital is to be used to eliminate accumulated losses and enable the payment of dividends. • Continuation out of an entity with no share capital – under the Companies Act, a body corporate incorporated, registered or existing under the laws of any jurisdiction outside the Cayman Islands may apply to the Registrar to be registered by way of continuation as an exempted company limited by shares. It is currently a requirement that any such overseas body corporate must have a share capital. This requirement will be removed when the Amendment Act comes into force, allowing for an overseas body corporate to be continued into the Cayman Islands regardless of whether or not it has a share capital. • Conversion of LLCs and foundation com - panies to exempted companies – the Com -
panies Act will introduce new conversion procedures allowing Cayman Islands LLCs and foundation companies to be re-registered as exempted companies. Conversions of exempted companies to Cayman Islands LLCs are already permitted under the Limited Liability Companies Act (as amended), and these amendments will provide further flexibil - ity for entities to convert to the most suitable corporate form. This may be of particular use for the growing number of foundation com - panies initially being formed in the jurisdiction by those operating in the fintech industry. Once in force, these upcoming changes will seek to ensure that the Cayman Islands remains a jurisdiction that is dynamic in nature and able to adapt to the changing corporate landscape. Cayman Islands entities – listings on US stock exchanges Entities registered in more than 40 jurisdic - tions are currently listed on the New York Stock Exchange (NYSE) and Nasdaq. Among these dif - ferent jurisdictions, outside of the United States, there are more Cayman Islands registered listed entities than any other foreign jurisdiction. At the end of 2024, there were approximately 430 Cay - man Islands entities listed on NYSE and Nasdaq, accounting for approximately 35% of listed enti - ties formed outside of the United States. With the expectation that the number of initial public offerings (IPOs) will increase, the Cay - man Islands is well placed in 2025 to build upon its established reputation as the jurisdiction of choice for prospective issuers. Still a jurisdiction of choice for SPACs and IPOs The most significant factor in the increase in the number of Cayman Islands listed entities is the
420 CHAMBERS.COM
Powered by FlippingBook