Business Law Developments In The Cayman Islands

Introduction

Business law developments in the Cayman Islands during 1998 included the coming into force of significant new legislation in the areas of trusts and captive insurance. Also worthy of mention is the Cayman Islands Stock Exchange which has achieved notable successes in its opening year of operations.

Special Trusts (Alternative Regime) Law

The Special Trusts (Alternative Regime) Law ("STAR") was enacted for two primary reasons; first, to make provision for the creation of non-charitable purpose trusts and, secondly, to create an entirely new regime for a new kind of trust.

Under English law principles, the position has always been that a trust can exist either for persons or for charitable purposes. Consequently, trusts for purposes which do not fall within the definition of what is charitable are invalid. The rationale for this is that for a valid trust to exist there must be a person who can enforce the obligations of the trustee to administer the trust in