Effective 1 January 2026, the Cayman Islands Companies (Amendment) Act, 2024, will introduce major amendments to the Cayman Islands Companies Act (as revised). These changes are designed to modernise corporate governance, streamline administrative processes and offer more flexibility to Cayman Islands entities. The objectives include reducing administrative burdens, broadening restructuring options and reinforcing compliance obligations for entities registered in the jurisdiction. 

Cayman Islands Companies Act: What are the key amendments?

Streamlined Reduction of Share Capital  

Among the most significant reforms is a streamlined process for the reduction of share capital, eliminating the current requirement for a special resolution and confirmation by the Grand Court, which can be both time-consuming and costly.  

Under the new framework, it is now possible to reduce share capital solely by passing a special resolution, provided a solvency statement supports it. The company’s directors must issue this statement within 30 days before the resolution. Significantly, if a director knowingly provides a solvency statement without reasonable grounds that debts can be met, it amounts to an offence. This underscores the serious weight of their compliance responsibility. 

If the company opts for this alternative procedure, it must, within 15 days of the special resolution, file with the Registrar of Companies a copy of the solvency statement. It must also submit a minute detailing the new share capital information, including the amount, shares, value and paid-up status. The Registrar will then register the documents, issue a certificate and publish a Gazette notice. From that point, the registered minute is treated as a substitute for the relevant part of the memorandum of association.  

Flexibility in Share Structuring  

The amendments also allow companies to issue and redeem fractional shares, expanding the scope of existing redemption rules to cover fractions. This gives firms greater flexibility in equity management, especially for mergers, stock splits or dividend reinvestments.  

Expanded Foreign Company Continuation  

The new Act has broadened eligibility for foreign entities seeking registration by way of continuation in the Cayman Islands. Previously, only companies with both limited liability and share capital could apply. The Act removes the share capital requirement, meaning any foreign company with limited liability, regardless of its share structure, may register with the Cayman Islands Registrar.  

Re-registration and Conversion Opportunities  

The amendments to the Cayman Islands Companies Act introduce new options for entity conversion and re-registration, providing practical tools for corporate restructuring.  

• Exempted Company to Ordinary Resident Company: An exempted company may re-register as an ordinary resident company by passing a special resolution amending its memorandum and articles of association and filing the required documents with the Registrar. Upon certification, the company officially becomes an ordinary resident company, and any tax undertaking ceases immediately. The re-registration does not create a new entity and the company’s identity and continuity remain intact.  

• Limited Liability Company (LLC) to Exempted Company: An LLC may re-register as an exempted company by obtaining a certificate of good standing and securing member approval of the “Conversion Consent,” which requires two-thirds of the members or another method outlined in the LLC agreement. Once re-registered, the LLC ceases to exist; its agreement ends, and its members become shareholders of the exempted company. Any prior tax undertaking lapses, but the newly registered exempted company may apply for a fresh undertaking.  

• Foundation Company to Exempted Company: A foundation company can also re-register as an exempted company, subject to the same requirements as other conversions: a certificate of good standing and a special resolution adopting a registration declaration, along with new constitutional documents.  

Overall, these reforms underscore the Cayman Islands’ commitment to maintaining its reputation as a flexible corporate domicile, streamlining processes and expanding avenues for capital management and restructuring options.  

Even with these regulatory changes, your business can keep moving forward. You can rely on a trusted partner like Bolder Group as we help companies and individuals adapt to Cayman Islands corporate law updates, ensuring compliance, smooth conversions and strategic structuring. Contact us today to secure your business under the new Companies Act.   

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

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