Benefits to Investors/Shareholders

Tax-neutral Environment

One of the key advantages for investors is the tax-neutral environment. The Cayman Islands does not impose taxes on SPVs or their shareholders, which means that investors can potentially enjoy higher returns on their investments without the burden of local taxes. This tax efficiency is particularly beneficial for international investors looking to optimize their after-tax returns.

Flexible Regulatory Environment

The Cayman Islands also offers a flexible regulatory environment, particularly regarding the requirements for issuing securities. Cayman law does not allow the issuance of a prospectus when an exempted company offers shares to the public. This reduces the regulatory burden on investors, making it easier and more cost-effective to participate in securitization transactions.

Right to Redemption

In some types of trusts, investors may have the right to redeem their shares or units for cash or other assets. The terms of redemption, including timing and valuation, are typically specified in the trust agreement or offering documents.

Right to Transfer or Sell Interests

Investors generally have the right to transfer or sell their interests in the trust, subject to any restrictions outlined in the trust agreement or securities regulations. This allows investors to exit their investment if they choose.