The Cayman Islands provide a highly regulated, internationally acknowledged, tax-neutral offshore business climate which is dynamic and responsive, with more than 90,000 active companies being registered in this jurisdiction.
The Cayman Islands
not only provide a tax-free business environment and very low corporate maintenance requirements but they also offer a high degree of investor protection. This is possible because there are no mandatory requirements to disclose the identities of the company shareholders and directors.
The Cayman Islands exempted company is a business structure with many advantages for foreign investors looking to open an offshore company that is 100% foreign owned and not liable to taxation.
George Town offers a fast incorporation process, privacy and flexibility to investors who choose to register a company in Cayman Islands.
In addition to opening a new company in the Cayman Islands, investors who are interested in registering a trademark can do so at the Cayman Islands Intellectual Property Office.
Frequently asked questions
1. What are the benefits of setting up a Cayman Islands company compared to other countries?
The Cayman Islands is famous for registering offshore companies and it confers and extremely advantageous tax system which does not impose taxes on income, corporate gains, inheritance, capital gains or gifts.
The main difference between the Cayman Islands and other countries, more specifically those that also offer options for convenient offshore company formation, is the use of the offshore business. The Cayman Islands have a well structured company law, a trait that has attracted many foreign investors who were particularly interested in opening businesses of a certain type, for example holding companies. Other differences may also refer to the audit requirements, which may be more stringent in different offshore centers.
2. How much time does it take to incorporate an exempted company in Cayman Islands?
A Cayman Islands exempted company is incorporated when the registration documentation is filed with the Registrar of Companies.
This can take as much as four working days because of the fact that the documents need to be drafted accordingly. Investors who wish to open an exempted company do not need to be in the country at all times, they can outsource the first phase, the one involving preparing the documents, to our team of company formation experts. Therefore, in practice, opening a company in the Cayman Islands will be fast for an interested investor.
The certificate of incorporation is issued by the Registrar of Companies in maximum two to three business days after filing.
3. How many directors must an exempted company have?
Such a legal entity in the Cayman Islands should have at least one director. The company director can be an individual or another company. This requirement is mandatory, however, investors should also know that nominee director services are available upon request. Essentially, this means that the founders do not need to act as company directors. They can add an extra layer of confidentiality if they appoint another individual who will act as director under a fiduciary agreement. The director appointed in such a manner will not be the beneficial owner.
4. Does such a company need to have local directors or shareholders?
It is a frequently asked question we often receive. The answer is no, it is not necessary to have local directors and shareholders for setting up a Cayman Islands exempted company.
5. Is Cayman Islands a tax free country?
The Cayman Islands has an alternative tax system. There are no company or corporation taxes, no income taxation, inheritance, capital gains or gift taxes here.
Investors who wish to register a company in Cayman Islands should note that although there are no corporate taxes, the business, once incorporated, will be asked to pay an annual fee which is based on the authorized capital.
The main fees, in force when this article was written, are listed below:
- 800 $: the registration fee for a LLC in the Cayman Islands and the subsequent annual fee;
- 500 $: the fee for the re-registration of the foundation company;
- 120$: the fee for a 90 days name reservation for a LLC;
- 75$: each amendment to the LLC Registration Statement, for example the change of the registered office.
As seen from this list, there are several fees that will apply upon registration and the subsequent annual fees. Investors should keep in mind that the currency used is the Cayman Islands Dollar and the conversion rate in USD may be set by the General Registry on the date of the payment.
6. How many shareholders should an exempted company in the Cayman Islands have?
An exempted company in the Cayman Islands should have at least one voting shareholder. Like in the case of the director, only one shareholder is required and he can be an individual or another corporation.
7. What addresses have to be provided for every shareholder or director?
For private persons, a residential address is needed. For legal entities, a registered office address or a business address is required.
Another important requirement in terms of addressed for the new company is that it needs to be based in the Islands. The registered office is to be located in the Cayman Islands. Many foreign investors will choose to use a virtual office package when they open a Cayman Islands exempted company. This package is advantageous because the address of the office will be used for registration and, in many cases, the location is a prestigious one, that will add credibility and help maintain a good business image.
8. Do I have to be physically present in the country to set up the legal entity?
It is not mandatory. However, certain documents may need to be signed by the beneficial owner and our team will need a set of documents for the purpose of incorporation. We encourage you to reach out to us in advance in order to find out our express requirements, the documents that are mandatory as well as any other information that may be of interest before starting the actual incorporation process.
9. How much time it takes to close an exempted company in the Cayman Islands?
In general, the time will depend on the size of the business, its activities and whether or not it has due debts to creditors. In practice, in simple cases this can mean approximately three days, however, we strongly encourage you to reach out to our agents to receive more information because a voluntary liquidation is different from a court-ordered one, and the latter is lengthier.
10. How rapidly can I receive the certificate of incorporation?
Our Cayman Islands company formation consultants
appreciate that the time needed for receiving the certificate of incorporation is around two to three business days, unless it is filed on an express basis, when the certificate is returned in a few hours.
The Cayman Islands are an attractive jurisdiction not only because of tax neutrality and privacy but also because of the wide range in which the companies set up have can be used. This flexibility, as well as the geographical positioning close to the United States, makes it a preferred offshore investment center, especially for US investors. A Cayman Islands exempted company can be used for holding purposes, as well as trading and engaging in shipping operations, for real estate holding (as opposed to companies that are only involved in stock holding – which is also a valid option) to holding the ownership of licenses and patents.
The multiple uses, quick and easy reporting requirements and the accessible obligations in terms of capitalization and management all make it advantageous to register a company here.