cayman company incorporation
  • [En]

  +1 888 959 8022

+1 888 959 8022
Company Formation Cayman Islands



Setting Up a Cayman Islands Company

Updated on Wednesday 11th August 2021

Rate this article
5 5 1
based on 2 reviews

The Cayman Islands offer an attractive business environment, with a focus on tax neutrality and policies for easy company incorporation.
Setting up a Cayman Islands company is a process that requires a few key steps. Our team of agents who specialize in company incorporation can help you throughout all of the necessary phases so that you can start doing business as fast as possible.
Below, we answer some of the most common questions investors have when they decide to incorporate in this offshore location.

What are the costs for company formation in the Cayman Islands?

Setting up a Cayman Islands company is a process with few requirements. Included here are a set of fees for company formation which vary according to the authorized capital for the company. When the capital exceeds 50,000$, the government fees are between 730 (upon incorporation) and 850 (annual) $, and these values grow as the share capital increases. For example, when the authorized capital is above 2 million USD, the incorporation fees are around 3,000 $ and the annual ones around 3,100$. 
These fees can be subject to change as new government updates take place. You can reach out to one of our Cayman Islands incorporation agents for detailed information about these fees.

What are the types of available business entities?

The list below includes the types of business entities available for incorporation in the Cayman Islands:
  • - The exempted company: suitable for international trade but cannot conduct business within the Islands and with Cayman residents;
  • - The non-resident company: an alternative to the exempted one that has similar requirements for incorporation;
  • - The exempted limited partnership: requires one general partner and one limited partner with the general one being a Cayman Islands resident;
  • - Excluded person financial company: similar to the exempted companies, can include a company that manages securities for one or more members of a group.
The advantages of starting a company in Cayman Islands.png


How many company directors and shareholders are needed?

The company management requirements in the Cayman Islands are light. The exempted company, the non-resident company, and the excluded financial person company can be incorporated with a minimum of one director and one shareholder. The identities of the beneficial owners are protected as there are no requirements to disclose their identities in public records. 

What are the main corporate compliance rules?

Companies in the Cayman Islands are required to have a registered office on the island as well as a company secretary. Special consideration must be given to the notification requirements in case of changes to the company’s memorandum or articles of association as well as the registered office address (no more than 30 days from the change).

Main reasons to incorporate in the Cayman Islands

Below, we present the five most important reasons for setting up a company in the Cayman Islands
  1. Tax benefits: the tax burden of a company is significantly reduced in an offshore center like the Cayman Islands.
  2. Asset protection: a Cayman Islands company can be used as a vehicle for asset protection and management as well as for IP rights holding.
  3. Easy incorporation: the Cayman Islands company formation process is a simple one, with only one director needed to form the company.
  4. Few requirements: in addition to an easy setup, the general corporate management, accounting and reporting requirements are low for locally registered companies.

Cayman Islands company formation with the help of our experts

The Cayman Islands exempted company is a commonly used business form in this jurisdiction. A previously stated, only one director and on shareholder (who can be the same person) can open this company. Their privacy is respected because there is no public access to their names and the corporate documents do not need to be made public– another important reason to incorporate in the Cayman Islands.
Cayman Islands incorporation is a process that requires only a few key steps, such as selecting an original business name and assigning a registered agent as well as having a registered office in the Islands.

What are the conditions for corporate share capital in the Cayman Islands?

There are no formal requirements for a minimum authorized capital in the Cayman Islands. While in most jurisdictions investors are required to deposit a minimum amount in a bank account, for the purpose of incorporation, this is not mandatory in the Cayman. In practice, investors can choose to incorporate the company with a minimum share capital of, for example, 1 US$. 
One of our agents who specialize in Cayman Islands incorporation can give investors more details on the share amount they can subscribe when they open the company.

What is the status of shareholders in a Cayman Islands exempted company?

According to the Companies Law, when a legal entity has a share capital and it is, for example, a limited liability company, the liability of the shareholder is the amount paid on the subscribed capital. This is a defining trait for limited liability companies and it is an advantage for investors. Consequently, when the company is wound up, the shareholder may be liable for that amount, but it will not exceed it. 

How is the share capital treated?

According to the Companies Law, a company in the Cayman islands that is limited by shares can increase its share capital, can concert its paid-up shares into stock, can subdivide the shares into shares with a smaller value (than that provided by the Memorandum; however, subject to certain conditions) and can also cancel shares, which at the date of the resolution for this action have not been taken.
The increase in the company capital needs to be approved by a Shareholder’s resolution. The Registrar is to be notified of such action within 30 days of the resolution. 
Investors who are interested in Cayman Islands company formation should know that a fee is payable upon the increase of shares.
Companies are allowed to reduce their share capital, when the Articles allow for this action and when they receive the confirmation from the Grand Court of the Cayman Islands. the reduction can be made by reducing the liability on the partly-paid shares, by canceling the share capital that is lost or unrepresented by assets or by means of paying off any excess capital. The Memorandum can then be altered. Companies that decide on the reduction of capital are required to obtain approval from the Grad Court in order to confirm that the creditors will not suffer any prejudice as a result of the capital reduction.

What shares can a Cayman Islands issue?

In case of a Cayman Islands exempted company, the shares may be with or without nominal value, and when they do not have a par value, this will be mentioned in the company’s Memorandum. A company can issue discount shares when this action has been approved by an ordinary resolution and it was sanctioned by the Grand Court (subject to certain conditions). 
The purchase or the redemption of shares must be authorized by the company’s Articles of Association, otherwise, such actions are not permitted. 

The characteristics of the LLC in the Cayman Islands

There are several types of business entities that can be incorporated in the Cayman Islands, among which the two most popular are the exempted company and the non-resident company. The LLC is also a business form that has won the attention of foreign investors because of its characteristics that allow, as the name suggests, for liability only up to a certain invested amount.
This business form was introduced rather recently, through the Limited Liability Companies Law of 2016. The LLC is a business entity that has legal capacity and whose members have limited liability, at the same time being a type of structure that allows for a great deal of flexibility. It can be used for the creation of investment funds, joint-venture companies or other structures.
The LLC does not require a minimum capital, its members are not made public and it is not subject to taxation.  This type of company requires at least one member at all times and, after the business is formally registered, the company may add new members. The LLC does not have a Board of Directors and, when permitted by the company’s founding documents, the manager may also act as a company member.

LLC incorporation in the Cayman Islands

The steps for opening an LLC are described below by our Cayman Islands incorporation specialists:
  1. Choose a company name: this is the first step and the company’s name should contain the abbreviation of the business form.
  2. Establish a registered office: this is an address in the Cayman Islands where the company will be based and where all of the notices will be sent.
  3. Draft the company’s documents: these will contain information as per the duration of the company, a declaration of the business that will be undertaken by the LLC (which must not contravene with the Cayman Islands permissions).
  4. Application for registration: the LLC will receive its Registration Certificate from the Register within three to five days after the application was submitted.
Opening a bank account is also a step in opening the LLC.
It is important to note that the LLC is conditioned to not undertake business within the Cayman Islands. This means that it will engage solely in activities outside of this jurisdiction, such as international business services, international trade, asset holding or others. For this purpose, the company founders will submit a declaration upon incorporation that shall state the fact that the business will comply with this restriction. Failure to comply with this measure would deem the company manager guilty of an offense and the company would be removed from the Register. 
One of our Cayman Islands incorporation agents can provide more details on the conditions for registration. Once this process is complete, the company receives a Registration Certificate – this is proof that the new business is compliant with the Cayman Islands laws. Any change in the company particulars is to be notified to the Registrar within 30 days of such occurrence.
Investors who open a company in the Cayman Islands can expect their registration certificate to be issued within three to five days. An expedite option of 24 hours is available for an additional fee.

The Limited Liability Company Agreement

An LLC in the Cayman Islands will be incorporated based on a special Agreement. This document is of great importance to this business form as it lays out the duties, liabilities, and rights of the members, the manner in which they may retire or transfer shares and interests as well as the manner in which they will be able to make contributions and allot shares. It is also used for guidance in case of company wind-up as well as for reference for executing documents. 
Investors should remember that this document may be drawn up to include the provisions they so wish, provided that they do not contravene with the laws of the Cayman Islands or any express laws that may apply in the case of the LLC. There is a great degree of flexibility in structuring the LLC Agreement and our Cayman Islands incorporation agents can assist investors who wish to draw up this document.

Requirements for a Cayman Islands LLC

An LLC is required to comply with certain mandatory requirements. We list these below:
  1. Registered office: the company must maintain an office at all times in the Cayman Islands; when provided via a registered office service, the said provider must be a licensed one.
  2. Register of members: this must be kept and updated accordingly; it includes the names and the addressed of the company members; a separate manager's register should also be kept.
  3. Register of security interests: this includes the notes that have been served at the registered office pursuant to law.
  4. Others: separate registers are to be kept for mortgages and charges; others can include proper books of account and a record of the contributions of each member; specialized accounting services can be requested for this purpose.
The Cayman Islands limited liability company is a business form that is very popular among foreign investors, most notably U.S. entrepreneurs who are interested in opening an offshore but also individuals from other countries. This is a flexible vehicle that, although recently introduced, it can be used as structured as the investors see fit. It may serve as a special purpose vehicle, for asset holding, or for the purpose of creating an investment management company.
Companies that provide certain types of services, such as trading, need to obtain special permits and licenses. A Trade and Business License is issued by the Department of Commerce and Investment.
Requesting specialized assistance from our team of professionals is one of the most convenient ways in which investors can open this type of company in the Cayman Islands. Our packages include complete assistance for registration as well as additional services such as nominee director and shareholder services, virtual office and registered office services.
Our team of lawyers can give you details about the legal requirements that apply in certain fields.
The Cayman Islands remain a popular jurisdiction for offshore company formation, as reflected in the following statistics presented by the Cayman Islands General Registry: 
  • 1,141: the number of companies registered in the Cayman Islands during October 2019;
  • 110,451: the number of active companies as per the data available for the third quarter of 2019;
  • 16,326: the total number of companies registered during 2018 in the Cayman Islands;
  • 13,046: the total number of companies registered in 2017 in the Cayman Islands.

Investments in the Cayman Islands

The Cayman Islands offer a favorable business and taxation regime. Some of the advantages include fact incorporation, economic stability, and privacy as well as flexibility in terms of the chosen business structures. The statistics below show the percentage of companies incorporated, as per their type, out of the 106,291 companies that were registered when the data was collected in September 2018:
- 84.3% exempt companies;
- 6.3% resident companies;
- 4.6% foreign companies;
In April 2019, there were 920 exempt companies registered in the Cayman Islands and 65 limited liability companies. there are 108,035 active companies in the Cayman Islands as per the statistics for the first quarter of the year.
For more details about how to open a company and the ongoing compliance, please contact our Cayman Islands company formation agents.

Meet us in George Town

Call us now at +1 888 959 8022 to set up an appointment with our lawyers in George Town. Alternatively you can incorporate your company without traveling to Cayman Islands.

As a Compass client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Cayman Islands.

Contact us