Cayman Foundation Companies Surge as Legal Structure for DAOs

The Cayman Islands saw a 70% increase in registered foundation companies by the end of 2024, becoming a legal hub for DAOs and Web3 projects.

This growth solidifies Cayman’s role in shaping blockchain governance and tax compliance, especially as new tax transparency rules approach.

Cayman Islands Host Over 1,300 Foundation Companies

By the end of 2024, the Cayman Islands witnessed over 400 new foundation company registrations in the first five months of 2025, bringing the total to surpassing 1,300. These foundations have become the preferred structure for DAOs, pivotal in custodying treasuries, holding IP, and managing compliance matters.

The operational and financial implications are notable. At least 17 foundation treasuries now hold over $1 billion each. The upcoming OECD Common Reporting Standard aims for tax transparency but excludes passive foundations from mandatory reporting.

Responses from stakeholders highlight admiration for the Cayman’s regulatory clarity. Haymond Rankin emphasized the jurisdiction’s modern legislation and legal certainty offering flexibility, while Melissa Lim noted Cayman’s rising popularity due to such attributes, setting the standard for governance.

“The growth of foundation companies registered in Cayman reflects the jurisdiction’s blend of modern legislation, robust professional services, and regulatory clarity,” said Haymond Rankin, Associate Director for the Fintech and Virtual Asset Sector at Cayman Finance.

Evolving Legal Frameworks Drive Global DAO Compliance

Did you know? The Cayman Islands, traditionally favored for hedge funds, are now increasingly pivotal for DAOs, drawing nearly $10 billion in treasury assets due to robust legal frameworks and operational clarity.

Research from Coincu indicates that Cayman’s surge in DAO-related registrations could result in a long-term shift in how blockchain entities handle compliance globally. As DAOs grow, the demand for clear, flexible legal structures is expected to drive further legislative developments, as highlighted in IFC Review Articles and Updates.

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