The Cayman Islands has enacted The Fraudulent Disposition Law, 1989, effective May 1, 1990, which replaced the Statute of Elizabeth. This law is not nearly as liberal as many other jurisdictions in that it has a six year statute of limitations and provides at section 4.(1) that "every disposition of property made with an intent to defraud and at an undervalue shall be voidable at the instance of a creditor thereby prejudiced." The law only protects creditors who were in existence at the time of the transfer. Unanticipated future creditors are not protected by the Cayman law. The burden of proving the willful intent of the transferor is on the creditor. Suit can only be brought by a creditor on behalf of himself. A Cayman court will not recognize a suit brought by a trustee in bankruptcy on behalf of all creditors.

A trust on the Cayman Islands settled without local resident beneficiaries may register as an “exempted trust” An exempted trust is granted a fifty year tax holiday. The law permits substantial flexibility, including a fixed perpetuity period or up to 100 years, provided the trust is submitted to the Registrar for advance approval. In addition, Cayman law permits the selection of Cayman law in the trust instrument even though neither the settlor, the trust property nor the trustees have any connection with the Cayman Islands. If Cayman law is selected, the trust cannot be voided on the ground that it contravenes the laws of another jurisdiction (including forced heirship laws), including the domicile of the settlor, or is not recognized by the law of another jurisdiction (e.g. purpose trusts).

Despite the less favorable trust law and despite the fact that a comprehensive review of trust legislation is currently in process, the Cayman Islands remains one of the favored jurisdictions for the settlement of asset protection trusts. The Cayman Islands, like the Bahamas, has strong secrecy laws.

The Cayman Islands boast a very strong banking presence. Grand Cayman has 538 Banks which hold over $430 billion in deposits. By way of comparison, that makes Grand Cayman one of the world's ten biggest financial centers, comparable to London, New York and Tokyo.