Cayman Islands Witness Significant Rise in Web3 Foundation Company Registrations
The Cayman Islands have seen a substantial increase in the registration of foundation companies, with a 70% rise compared to last year. As of the end of 2024, there were over 1,300 registered foundation companies, and more than 400 new registrations have already been recorded in 2025. This surge is largely attributed to the growing demand for decentralized autonomous organizations (DAOs) and ecosystem managers for large Web3 projects.
According to a press release from Cayman Finance, many of the world’s largest Web3 projects are now registered in the Cayman Islands, including at least 17 founding companies with treasuries exceeding $100 million. The Cayman Foundation has become a preferred tool for DAOs, providing a legal shell that enables them to sign contracts, hire contributors, own intellectual property, and interact with regulators while protecting token holders from personal liability.
Why DAOs Choose the Cayman Islands
The Cayman Foundation Company offers a unique solution for DAOs, providing its own legal personality and the ability to own assets and sign agreements. This is particularly important in light of the Samuels v. Lido DAO case, in which a US federal judge found that an unsettled DAO could be treated as a partnership under California law, exposing participants to personal liability. The Cayman Foundation Company aims to bridge this gap, giving token holders peace of mind while providing the necessary legal framework for DAOs to operate effectively.
The Cayman Islands’ tax neutrality, familiar legal framework, and ecosystem of companies specializing in Web3 Treasuries have made it an attractive destination for Web3 projects. In contrast, other jurisdictions have struggled to provide a clear and comprehensive regulatory framework, with the US, for example, only having a handful of states that explicitly recognize DAOs as legal entities. 
From Easy Refuge to Compliance Player
The rise in Web3 fundamentals coincides with a shift in the Cayman Islands’ regulatory stance, with the introduction of the Organization for Economic Co-operation and Development’s Crypto-Asset Reporting Framework (CARF). The CARF will impose due diligence and reporting obligations on Cayman “Reporting Crypto-Asset Service Providers,” requiring them to collect tax residency data from users, track relevant transactions, and file annual reports with the Tax Information Authority.
However, legal experts note that under current interpretation, CARF reporting applies to relevant crypto asset service providers, such as exchanges, brokers, and dealers, which may exempt structures that merely hold crypto assets, such as protocol treasuries, mutual funds, or passive foundations. This means that many pure-play treasury or ecosystem management foundations should be able to continue to benefit from the legal certainty and tax neutrality of the Cayman Islands without being forced into full reporting status.
For more information on the rise of Web3 foundation companies in the Cayman Islands, visit Cointelegraph.
