There are currently no capital gains or income taxes on the Cayman Islands

Creating an offshore trust in the Cayman Islands- no income taxes

The following describes how to create trust in the Cayman Islands. Analyzed why the creation of a trust in this particular jurisdiction is a very beneficial step to protect assets. Considered in detail the requirements for creating a trust in the Cayman Islands. In addition, the purpose and immediate benefits derived from the activities of an offshore trust are shown.

Why create an offshore trust in the Cayman Islands?

In the Cayman Islands, they are deservedly proud of the high quality of their trusts and the fact that for many years they have been successfully creating them. The Cayman Islands Trust Act (revised in 1967) is based mainly on the English Trustee Act of 1925 and creates a solid legislative base and financial infrastructure for offshore investors. The Cayman Islands are known for their reliable legal system, coupled with high-quality professional services and skills. This jurisdiction is a tax haven for offshore founders who wish to establish a trust to protect their assets.

A distinctive feature of the Cayman Islands jurisdiction is the adoption in 1985 of the Law on the Term of Existence of Trusts, which extended this period to 150 years, which is not the case in many other offshore jurisdictions. There are several reasons why the Cayman Islands are located at the top of the list of jurisdictions that are chosen when creating a trust. Firstly, trust in the Cayman Islands does not need to be registered. Here all the conditions for the founders and beneficiaries, and providing them with assistance. For most trusts in the Cayman Islands, there is no requirement that the trustee is a resident of the Cayman Islands. Another feature of creating trusts is efficiency. It is often believed that creating trust takes a long time, but in the Cayman Islands, it takes only a few days. Moreover, there are currently no capital gains or income taxes on the Cayman Islands, as well as taxes on company income or interest income and dividends from non-residents. You can also obtain more information at https://offshorecitizen.net/tax/countries-with-no-income-tax/.

What is a trust in the Cayman Islands?

First, trust in the Cayman Islands must meet several basic requirements. The main elements of creating a trust are the presence of a trustor (transferring its assets / personal fortune to trust) and a designated trustee (an individual appointed to manage the trust). The purpose of the trust is to bring benefits to the beneficiary. The trustee is obliged to faithfully manage the trust in accordance with the declaration of trust. The founder may also have a guarantor, whose main task is to control the activities of the trust and ensure its operation in accordance with the declaration of trust (trust agreement). The trustee administers the trust on behalf of the founder for the benefit of the beneficiaries appointed by him.

After its establishment, trust in the Cayman Islands does not become a legal entity. The trust status is determined by the trust relationship between the founder and the trustee, aimed at obtaining benefits exclusively to the beneficiaries.

Offshore trusts are used mainly by wealthy people who want to preserve their wealth for future generations. An attractive feature of trust is the fact that potential heirs cannot sue the trust, and the assets of the trust cannot be seized. Many people want to protect their assets, being a founder, you can transfer your assets to a trust and legally declare that they do not belong to you.

The most commonly used types of trusts in the Cayman Islands

The legislation of the Cayman Islands provides for two main areas of activity of trusts:

1) Ordinary trusts

2) Preferential Trusts

The most popular types of trusts in the Cayman Islands:

– Discretionary trusts – the trustee receives an “absolute right” to manage the trust and place the trust property.

– Target trusts – such trusts are not yet registered in the legislation of the Cayman Islands, but soon the offshore founders will be able to legally create targeted trusts for non-charitable activities.

– Private trusts – allow the founder to maintain a certain degree of control over their property.

– Charitable trusts – are created in order to protect the environment, combat poverty and ensure fundamental freedoms.

Assignment of Cayman Islands Trusts

– Property planning and management

– Professional investment portfolio management

– Asset Protection

– Family inheritance planning and status distribution

– Tax planning

– Charity

– Emergency planning

– Avoidance of the right to an obligatory share in the hereditary mass

Advantages of an offshore trust in the Cayman Islands

– Benefits from the absence of taxation of profits, income, and dividends

– No capital gains tax

– No minimum capital requirement for trust creation

– Effective tax planning

– High investment protection

– Trusts in the Cayman Islands can function for up to 150 years under the Term of Trust Act

– High security

– Avoidance of the right to an obligatory share in the hereditary mass

– Avoiding proof of authenticity

– Lack of currency regulation

– High asset protection and condition management