A Guide To Cayman Foundation Companies In The Middle East

Cayman Foundation Companies are innovative structures that combine the features of a company with those of a trust. Since their introduction in 2017, they have become increasingly popular and are now firmly established as a flexible and reliable structuring vehicle. For clients in the Middle East, where family enterprises, legacy planning, and philanthropy play central roles in wealth management, Cayman Foundations offer a powerful solution that is internationally recognised, tax-neutral, and adaptable to both private wealth and commercial contexts.

What is a Cayman Foundation?

Cayman Foundations act as a hybrid between a trust and a company. They are companies incorporated under the Cayman Companies Act with special features under the Foundation Companies Act. This means that the fundamental corporate structure of a Cayman Foundation is a tried and tested one and legal jurisprudence in respect of Cayman companies will, to the extent it is relevant, also apply to Cayman Foundations. Unlike trusts, a Cayman Foundation has its own separate legal personality—it can sue and be sued, hold assets in its own name, and operate as a legal person.

This structure is particularly attractive for Middle Eastern families and businesses that:

• Require confidentiality and flexibility in structuring;
• Want a vehicle that is familiar in both common law and civil law contexts; and
• Seek a neutral, internationally recognised platform for succession and investment.

Key Features

The key features of a Cayman Foundation which have proven particularly popular are the following:

• Separate Legal Personality: Unlike a trust, the Foundation is its own legal person.
• Purposes: Can be created for charitable, non-charitable, commercial, or mixed purposes.
• Beneficiaries: Foundations may have beneficiaries, but unless specified otherwise, beneficiaries do not have legal standing. Oversight is instead vested in a Supervisor.
• No Shareholders: Foundations may be structured as "orphan" entities without members or shareholders.
• Flexibility: The rules can be tailored to the settlor or family's wishes, with bylaws (kept private) offering further adaptability.
• Application of Trust Law: Certain provisions of the Cayman Trusts Act extend to Foundations, including the ability for fiduciaries to apply to the Cayman courts for guidance—useful in protecting directors when making significant decisions, for example when making a major distribution or undertaking.

How Middle Eastern Clients Use Cayman Foundations

Private Wealth

A Cayman Foundation can serve many of the same functions as a trust, but with the advantage of legal personality. Families in the region may appoint a Founder (similar to a settlor) and a Supervisor (similar to a protector), retaining significant influence while ensuring long-term succession planning.

In some cases, a Cayman Foundation may be used as a Private Trust Company (PTC), eliminating the need for a purpose trust to hold PTC shares, resulting in a simpler and more efficient structure.

Philanthropy

Philanthropic giving is a cornerstone of wealth planning in the Middle East. Cayman Foundations provide a secure, flexible, and internationally recognised vehicle to manage charitable and religious giving, whether locally focused or global in scope. Unlike traditional charitable trusts, a Foundation has its own legal personality, allowing it to contract, own assets, and operate independently while being guided by the family's philanthropic vision.

Fintech, Web3, and DAOs

The Cayman Foundation has also become a leading structure for innovative projects in fintech, blockchain, and decentralised autonomous organisations (DAOs). For Middle Eastern entrepreneurs and investors active in the digital assets sector, the Cayman Foundation offers a compliant yet flexible vehicle to underpin emerging business models while ensuring legal recognition worldwide.

DAOs operate differently from many of today's traditional legal entities and business structures, with their objective being to achieve a more democratic form of governance whereby decisions are made by a defined community of token-holders. The flexible nature of Cayman Foundations allows governing rules and constitutional documents to be drafted in a highly bespoke manner with the organisation or project's objectives at the forefront.

Roles in a Cayman Foundation

Ordinarily, a Cayman Foundation will have the following roles:

• Founder: similar to the settlor of a trust, this will generally be the legal person responsible for establishing the structure by way of a contribution of assets. As the Foundation Companies Act does not formally define the role of a "Founder", and does not necessarily even require the appointment of a Founder, the governing documents may specify what (if any) powers the Founder will retain. For example, the Founder may reserve the power to appoint the directors, amend its governing documents or alternatively the Founder may have no ongoing role in relation to the Cayman Foundation.
• Directors: as with an ordinary company, a Cayman Foundation is managed by its board of directors. By default, the role and powers of the directors will be the same as for an ordinary Cayman company. However, there is scope to restrict the directors' exercise of their powers to better align with the specific entity's objectives.
• Members: while a Cayman Foundation must initially be incorporated with one or more members (in the same way as an ordinary company), one of the key features of a Cayman Foundation is that it can cease to have members at any time. The cessation or absence of a member will not affect the Cayman Foundation's existence, capacity or powers.
• Supervisors: Where a Cayman Foundation ceases to have members, it must have one or more "Supervisors" (who may but need not be directors). As suggested by the title, such officeholder essentially fills the gap left by the lack of members in that they can enforce the rules of the Cayman Foundation as against the directors and would typically have the right to access the files, books and accounts of the company.

Why Cayman for Middle Eastern Families and Businesses?

• Asset Protection: Cayman's legal framework shields against forced heirship and foreign judgments.
• Tax Neutrality: No income, corporate, or capital gains taxes in Cayman.
• Global Recognition: Cayman structures are widely accepted by banks, regulators, and exchanges worldwide.
• Flexibility: Can be structured for private wealth, family business continuity, philanthropy, or fintech innovation.
• Judicial Reliability: Cayman's courts are sophisticated and experienced in complex trust and corporate matters.

How Conyers Supports Middle Eastern Clients

Conyers has decades of experience advising high-net-worth families, family offices, and corporates across the Middle East. Our Cayman Islands team specialises in private client, trust, and corporate structures, providing tailored solutions that balance family governance, cross-border investments, and succession planning.

Through Conyers Client Services, our affiliated licensed trust and corporate administration arm, we offer comprehensive fiduciary support for Foundations—from establishment to long-term management—ensuring clients have a seamless end-to-end service.