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Cayman Islands

STAR Trust

A Trust established under the Special Trust (Alternative Regime) Act 1997, is a form of legal trust for the benefit of persons, purposes (charitable and non-charitable) or both.

STAR Trusts have an Enforcer, which executes the STAR Trust, and causes a separation between benefitting from Trust assets and being responsible for the application of the Trust.

As for trustees, it is required to appoint at least one licensed in the Cayman Islands.

STAR Trusts can be established for an unlimited period of time, and are an effective way to create private perpetual family trusts.

They are also commonly used as Trustees of a Private Trust Company. The STAR Trust is established to hold shares in a Cayman Islands Private Trust Company, assuring that it performs its role as trustee of a trust or series of related trusts.

This structure can be used even when the trusts are not all within the same jurisdiction. For instance, a single STAR Trust may own shares in a Private trust company, and it may act as a trustee in the Cayman Islands or in other jurisdictions.

It is also common for a business owner to use a STAR Trust to run a family business, making sure the business continues to operate after the owner’s death. The STAR Trust may be the holder of such shares for the purpose of allowing directors to continue to manage the business for a designated period of time.

STAR Trusts also serve as a vehicle for limiting the information that beneficiaries can access. Unlike ordinary trusts, where beneficiaries may have the right to access a great deal of information in connection with the trust. With a properly drafted STAR trust, those rights may be restricted or even eliminated. The execution of the trust and rights associated with the information are held by the Enforcer.

STAR Trusts are often used as an SPV (Special purpose vehicle) in structured finance and other transactions. They allow the structuring of off-balance/bankrupt transactions, since the STAR Trust entity may not be connected to the original parties of the transaction.

In addition, STAR Trusts provide flexibility to carry out philanthropic donations, where the settlor’s requirements are outside Cayman Islands’ limited definition of what is and is not charitable.


A trust established in the Cayman Islands may not be subject to local taxes applicable to the assets and income of the trust.

It must be noted that the choice of law of the trust would not be applicable to tax matters, which would be governed by the respective jurisdiction where the settlor, beneficiaries, assets or trustee are located, as applicable.

You should consult with your tax advisor or accountant to know the tax implications in your jurisdiction of residence when establishing a trust in Cayman Islands, transfer assets to it and receive profits from said assets.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • - Offshore Income Tax Rate
  • - Corporate Tax Rate
  • 0% Capital Gains Tax Rate
  • 0% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 0 Losses carryback (years)
  • 0 Losses carryforward (years)
  • 0% Personal Income Tax Rate
  • 0% VAT Rate
  • 0 Tax Treaties

Country details

Cayman Islands
George Town
North America

The Cayman Islands is a British Overseas Territory dependent on the United Kingdom and located northwest of Jamaica between the island of Cuba and the coast of Honduras in the waters of the Caribbean Sea. The Cayman Islands is a member of the CARICOM single market.

The 264-square-kilometer (102-square-mile) territory comprises three islands, Grand Cayman, Cayman Brac and Little Cayman, where about 69,000 people live, 55,000 of which live in its capital, George Town (Grand Cayman).

Its official currency is the Cayman Islands Dollar (KYD), pegged to the US dollar at a 1,227:1 ratio.

The Cayman Islands are a British overseas territory, designated by the UN Decolonization Committee as one of the last Non-Self-Governing Territories. The fifteen representatives who compose the Legislative Assembly are elected by the people every four years, they are in charge of managing the internal affairs. Of the elected members of the Legislative Assembly, five are elected to serve as ministers in a Cabinet headed by the Governor. The head of government is the Prime Minister.

The governor is appointed by the King/Queen of the United Kingdom on the advice of the British Government to represent the monarch.

The Cayman Islands has a solid economy, with one of the highest per capita income worldwide. Being also one of the most expensive places to live, since most products are imported and are subject to high tariffs.

Its main sectors are luxury tourism for its pristine beaches, scuba diving and high-end gastronomy, and offshore financial and insurance services, with hundreds of licensed banks, which handle about $500 billion in assets.

The Cayman Islands is one of the 5 largest financial centers in the world by deposits and the world’s largest financial center for investment funds, with the presence of the global largest financial institutions.

Main financial services available in the territory are private banking, hedge fund formation, and investment, trust services, structured finance and securitization, captive insurance, and international business company services.


We can help you incorporate a STAR Trust in Cayman Islands.
Please, contact us to request a free, no obligation consultation.


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