A limited liability company arrangement has been approved by lawmakers as a new type of business vehicle for the local financial services industry in the Cayman Islands.
The bill will make Cayman the first Caribbean overseas territory to implement a limited liability company, or LLC, arrangement.
“It is certainly a very exciting development for the financial services industry,” Financial Services Minister Wayne Panton told Legislative Assembly. “In five years, this legislation … will be viewed as an iconic product in the Cayman Islands.”
The Limited Liability Companies Law will “complement,” not replace, existing Cayman Islands business vehicles, he said. The designation allows the LLC firm to use the quicker, “more flexible” accounting rules of a partnership but provide a legal designation of an entity as a corporation. It is essentially a mix of Cayman’s current rules for an exempted company and an exempted limited partnership.
A Cayman Islands LLC can be formed for any “lawful business purpose” and requires at least one member of the “corporation” to be registered with the Cayman Islands Monetary Authority, Mr. Panton said.
“Importantly, with respect to the naming convention, the Limited Liability Companies Bill has been developed to describe an LLC without reference to the word ‘exempted’ to avoid undue criticism from certain groups in the international community who have an anti-Cayman Islands or anti-IFC [international financial center] agenda,” Mr. Panton said. The bill passed unanimously.by