Venture Capital Comparative Guide

1 Legal framework

1.1 Which general legislative provisions have relevance to venture capital investment in your jurisdiction?

The legislative provisions applicable in the Cayman Islands depend on the type of vehicle employed by the startup, which is typically determined by:

• the nature of its business;
• its activities; and
• the location of its target investors.

While operating companies are often established in other jurisdictions, many startups choose to incorporate their holding companies in the Cayman Islands. These holding companies are typically structured as:

• exempted companies, governed primarily by the Companies Act – this is the most common corporate vehicle used by startups;