Cayman Islands Offshore Company

The Cayman Islands, a prominent and reputable offshore company registration center, located on three islands in the Caribbean has a world-class legal, banking and financial services network. The Cayman Islands offer six different types of offshore companies, with the Cayman Exempted Company having the least restrictions and reporting requirements.

The Islands offer particular advantages to banks, offshore accounts, hedge funds and trusts and as a result, the Cayman Islands offshore banking sector has become the largest in the world with over 600 banks, claims over 85% of the world's Hedge Funds, and is home to a significant number of leading Trust Companies. The Islands also boast of having several Special Economic Zones and a special business links with China to encourage international investment

The Cayman Islands Company Law dates back to 1961 and is based off the 1921 UK Company Act. There have been four other amendments passed since its inception that have kept the Islands apace with the continually changing nature of the world's financial system making it a great place to go offshore.

For more information on the Advantages of the Cayman Islands as an Offshore Financial Center, click here

Advantages of a Cayman Islands

• Tax-free jurisdiction
• No corporate taxes
• Availability of Tax Exemption Certificate (TEC) that gives clients a guarantee that their company will not be taxed if in the future the government levies a tax
• Single-member ownership is allowed
• No reporting and financial accounting obligations
• Minimal annual return filing requirements
• Prestigious banking jurisdiction
• Sophisticated financial and banking system
• Long-standing and renowned offshore banking tradition
• No requirements to keep a registry of its members that is open to the public
• Flexibility in changing its founding documents ie. Memorandum and Articles of Association
• An Exempt Company may offer shares to the public
• The Confidential Relationships (preservations) Law 1976 makes it a criminal offence to divulge information to a third party
• The government does not support foreign government ‘fishing’ tax requests
• The Cayman Islands have signed a number of tax information exchange agreements with a number of countries in order to retain good relations with trade partners
• British Overseas Territory
• English speaking country
• Quick formation turnaround
• Stable political and economic environment
• Outstanding commercial, financial and professional services
• Excellent communications system
• Reliable and competent legal system based off of English Common Law
• Cayman Islands has business links with China (Companies are approved to be listed on the HK stock exchange)
• Largest offshore banking centre in the world
• Cayman Islands government recently enacted a Special Economic Zone (SEZ) to further international investment

Top Uses

• Own company shares or other legal entities
• E-Commerce Companies
• Management Companies
• Hold bank accounts, financial or commercial titles
• Asset Protection
• International Hedge Fund
• International commercial and financial activities
• Ship registration

Understanding Cayman Islands Company Formation

The Cayman Islands, a British Overseas Territory located in the Caribbean, is recognized for its stable political environment and is regarded as a premier offshore jurisdiction for company formation due to its tax neutrality and compliance with international standards, including the Economic Substance Filing requirement.

Advantages of a Cayman Islands Company

The primary advantages of forming a company in the Cayman Islands include:

• Tax Neutrality: Companies established in the Cayman Islands are not subjected to direct taxation. This includes the absence of income, capital gains, corporation, and withholding taxes.
• Stability: The territory provides political and economic stability, which is crucial for businesses seeking a reliable jurisdiction.
• Regulatory Environment: The Cayman Islands are compliant with international regulatory standards, ensuring transparent and cooperative business practices.
• Economic Substance Filing: Companies engaged in certain activities must report and demonstrate local economic substance, which can add credibility to Cayman-based entities.

Types of Cayman Islands Companies

There are two main types of corporate entities one can establish in the Cayman Islands:

1. Exempted Private Limited Companies
   • Not required to file an annual return or hold an annual general meeting if there's less than 60 members.
   • May issue no par value, negotiable, or bearer shares and are exempted from certain local laws applicable to domestic companies.
2. Limited Liability Companies (LLC)
   • Similar structure to a US LLC.
   • Provides a flexible structure with the protection of limited liability.

Other company types are also available, each catering to specific business needs.

Incorporation Process and Requirements

The incorporation process in the Cayman Islands is well-defined, requiring applicants to carefully select a company name, choose an appropriate company type, and comply with the legal and regulatory requirements. Each step, from naming the company to drafting the essential documents, is critical to forming a legally recognized entity.

Naming Your Company

To begin company formation in the Cayman Islands, the first step is to reserve a company name with the Registrar. It is essential the chosen name is unique, not already in use, and complies with local regulations. Prospective names can be checked against the Registry's database for availability.

Choosing the Company Type

The next step is selecting the type of company to incorporate. The options include Exempted Companies, Limited Liability Companies (LLC), and Special Economic Zone Companies, each tailored for different business needs. This decision affects the articles of association and memorandum of association which outlines the company's structure and objectives.

Meeting Legal and Regulatory Standards

Incorporation requires adherence to the Cayman Islands' legal and regulatory standards. The process involves submitting an incorporation application and pertinent documents to the Registrar for approval. Entities must ensure that they comply with the Cayman Islands’ legal framework, specifically attuned to international business requirements.

Director and Shareholder Requirements

The law mandates that a company must have at least one director and one shareholder, who can be individuals or corporate entities. There are no residency requirements for directors or shareholders. Details of the directors and shareholders must be submitted during the registration process.

Drafting Necessary Documentation

The final step involves preparing the Memorandum of Association and Articles of Association. These documents are crucial as they lay down the company's name, objectives, powers, and operational blueprint. Once these documents are completed and signed, they must be filed with the application to make the legal entity officially registered.

Key Corporate Features

Company Product Package

Includes:

1. Government Registration Fee (First year)
2. Registered Office Address (First year)
3. Registered Agent Services (First year)
4. Company Secretarial Maintenance
5. Certificate of Organisation
6. Articles of Organisation
7. Minutes of First Organisers Meeting
8. Ownership Certificates
9. Register of Members
10. FREE Phone and/or email consultations

How to Setup?

To incorporate a Cayman company with us is as easy as 1, 2, 3:

Step 1: Consult us for info/quote
Step 2: Submit docs (ID, address, refs, KYC) and fees
Step 3: Get digital docs in 2 days, physical in 7 days

Typical documents needed: Certified passport, address proof, references, KYC forms for directors/shareholders/owners.
The Cayman Islands offers various types of company structures including Associations Not for Profit, Exempt Companies, Foundation Companies, Limited Liability Companies, Non-Resident Companies, Overseas Companies, Resident Companies, Special Economic Zone Companies, and Unlimited Companies as per the Cayman Islands General Registry (CIGR).

There are two registration procedures for Cayman companies - a standard process that takes around 1 week to complete, or an express 1-day registration after paying an additional $500 express government fee.
In Cayman Island, people usually set up exempted limited partnerships, segregated portfolio companies, and LLCs.

To Incorporate an Exempt Company in the Cayman Island, the following details are needed:

• Submission of a Memorandum and Articles of Association
• Registration fee
• Amount of authorized share capital, number of shares and class of shares
• Names and addresses of Director must be disclosed to the Registry
• Sworn signed statement that the business activities proposed under the Memorandum will be conducted outside the Cayman Islands
• Name of the LLC
• Registered address of the LLC
• Name and address of the registered agent

Once your company is formed, you can open a corporate bank account which will require KYC and AML verification. All of the steps above can be done virtually, except some countries do require physical in-person visits in order to open a bank account.

Hard copies of corporate documents are typically ready within 7-10 working days after submitting all required documents. Express 48-hour company formation is also available for Cayman Islands companies upon request.

Get in touch to know the details, as this changes regularly. Once all these steps are completed, you will have the incorporation documents sent to your physical address. 

Corporate Taxation

There are no taxation requirements within the Cayman Islands for Exempted Companies who conduct their business outside of the Cayman Islands. This includes:

• no income
• no capital gains
• no profits
• no dividends

The Cayman Islands offer a Tax Exemption Certificate (TEC), though there currently are no taxes, this gives clients a guarantee that their company will not be taxed in the future in case there are changes to the existing company tax law. The tax exemption certificate can be obtained for up to 20 years for exempt companies.
While there are no direct taxes on companies, there is a nominal stamp duty applicable on certain documents. Additionally, there are import duties on goods entering the islands, though these do not impact the offshore financial services industry.

Economic Substance Law

Apart from the global effort for tax transparency, Cayman has enacted legislation that requires proof of economic substance in order for entities incorporated or registered there not be taxed. The International Tax Co-operation Economic Substance Act went into application from 1 January 2019 and it pertains to all entities formed in the Cayman Islands that are non-resident entities. 

All entities that are "overseas entities", whether an LLC on Private Company that take part in a wide range of specific industries. This includes everything except:

• investment funds or companies 
• companies which are tax resident outside the Cayman Islands
• companies that are authorized to carry on business locally as a domestic company

Only the companies that engage in the above industries are free from the new economic substance rules. All others must have:

• Cayman local management 
• Conduct core income-generating activities
• and must show employees and assets in Cayman.

A more thorough take on the details can be found here. But what this now means is that using an overseas entity in the Caymans as a holding structure for assets of an individual living overseas is no longer possible, unless there is significant local financial and commercial business within the country.

Foreign investors can purchase pre-incorporated shelf companies with no restrictions on founder or shareholder nationalities. These ready-made companies require annual registration fees, which are not burdensome.

Our firm ethically guides clients through international regulatory compliance across jurisdictions. Our transparent approach ensures businesses properly meet all legal and administrative obligations efficiently.

Corporate Details

Anonymity, Confidentiality and Disclosure

There are no requirements to disclose beneficial ownership nor the details and personal information of shareholders and directors to the public. However the name and details of the director needs to be submitted to the Company Registry and relevant regulatory authorities upon submission of incorporation documents. All information is held confidential with minimal personal exposure. Details are not made public. The use of nominee directors and shareholders are permitted.

Company Shares

A Cayman Islands Exempt Company can issue registered shares with par or no par value, preference shares, redeemable shares, voting and non-voting shares. Bearer shares prohibited.

Required Capital

The minimum issued share capital is USD 1 and the usual authorized share capital is USD 50,000 normally divided into 50,000 shares which is the maximum amount of shares given for the minimum amount of capital duty.

Opening a Corporate Bank Account

Many businesses open a corporate bank account for their Cayman company. Minimum deposits range from $10,000 to $100,000, depending on the bank. Requirements can vary and change over time. Your company can have its banking relationship elsewhere if preferred, especially for lower minimum deposits. Our firm assists with opening corporate bank accounts in the Cayman Islands or other suitable jurisdictions.

Financial Statements Required

An Exempt Company does not need to file any accounts, however, it is required that a company keeps appropriate financial records under the Companies (Amendment) Law 2012 which includes contracts and invoices for up to five years.

Directors

The minimum number of directors required for a Cayman Island Exempt Company is one. A director can be a natural person or a body corporate and of any nationality. Directors details and beneficial owners information are not open to the public, however details of the directors must be submitted to the Company Registry upon incorporation though they are held confidentially.

Company Secretary

There are no requirements for a secretary for a company, though it is customary to appoint one. A director can be the company secretary.

Company Meetings

There are no requirements that a Exempted Company needs to conduct formal meetings. If they do take place they can take place anywhere in the world, need not be recorded and can be conducted electronically.

Type of Law

The Cayman Islands law is based off of English Common Law

Shareholders

The minimum number of shareholders required for an Exempt Company is one. A shareholder may be a natural person or a body corporate of any nationality and may reside anywhere in the world. Personal details of shareholders are not publicly available and need not be submitted to the Company Registry.

Exchange Controls

There are no exchange controls in the Cayman Island

Powers of the Company

A Cayman Islands Exempt Company has all the powers given to a natural person.

Language of legislation and Corporate Documents

English is the main and official language of the country and all corporate documents are in English. The company name displayed on public records must include a legal entity identifier such as 'Limited' or the abbreviation 'Ltd.

Registered Office required

Yes a registered office is required for all Exempt Companies.

Local Presence

There are no local requirements for a Cayman Islands Exempt Company except for a local registered office. A registry of the members of the company must be kept at the local office, though the registry is not open to the public.

Audit Requirements

There are no audit requirements for a Cayman Island Exempt Company.

Annual Reporting

Exempt Companies are required to file annual reports. Though the requirements are minimal and consist only of a short statement that the business operations have been carried out outside of the Cayman Islands, (Section 193 of the Companies Law) and that all Bearer shares are held by a custodian. However, issuance of bearer shares was prohibited in the Cayman Islands from May 2016.

Language of Name

A company name can be in any language in the Latin alphabet including Arabic and Chinese if a translation is included. Company name requirements in Cayman Islands include: no identical/resembling existing names, restricted words like 'Royal', 'Imperial' without approvals, and words like 'Bank', 'Insurance', 'Gaming' requiring regulatory approvals. Foreign language names must have translation complying with requirements. Companies get a unique registration number upon incorporation.

Access to Double Tax Treaties

The Cayman Islands does not have any Double Tax Treaties in place.

Annual Tax for License

License fee for share capital less than USD 50,000 is USD 854

Companies with a share capital between USD 50,000 and USD 1 million is USD 1,220

Companies with a share capital between USD 1 million and USD 2 million is USD 2,420

Additional Services

Aside from company formation, the Cayman Islands provides intellectual property services. Trademarks registered here have a 10 year validity. Registration fees include $200 for one trademark class, $65 for additional classes, $250 for opposition notices, $200 for renewals, $300 for late renewals, and $350 for restorations.

FAQ

What is the process for incorporating a company in the Cayman Islands?

To incorporate a company in the Cayman Islands, one needs to reserve a company name, prepare the necessary documentation, submit an application, and pay the incorporation fees. The exact steps must follow local regulations and laws.

What are the costs associated with setting up an LLC in the Cayman Islands?

The costs to set up a Limited Liability Company (LLC) in the Cayman Islands include government fees, registered agent fees, and possibly legal and professional service fees. The total cost can vary based on the complexity of the business structure and services selected.

What are some potential disadvantages of incorporating a business in the Cayman Islands?

Incorporating in the Cayman Islands may present challenges such as the perception of being a tax haven, which can affect business reputation. Additionally, there may be higher costs of operation for foreign entities compared to local businesses.

How can I perform a company search in the Cayman Islands?

A company search in the Cayman Islands can typically be conducted through the Registrar of Companies. This search would provide details on the company's status, current directors, and shareholders, among other basic information.

What is the role of a registered agent when forming a company in the Cayman Islands?

A registered agent acts as a liaison between the government and the company, handling official communications and ensuring that the company complies with local regulations. Every company in the Cayman Islands is legally required to have a registered agent.

What legal considerations should be taken into account when establishing a company in the Cayman Islands?

When establishing a company in the Cayman Islands, one should consider the legal framework governing businesses, which includes local corporate laws and international regulations. It's important to adhere to laws concerning taxation, employment, and anti-money laundering regulations.

For professional assistance with establishing your Cayman Islands company, Offshore Protection offers comprehensive incorporation and ongoing support services. Our experts can guide you through every step of the process to ensure full compliance and help you maximize the benefits of your Cayman Islands entity.

Can Offshore Protection Create A Company For Me?

Yes, we can! Offshore Protection has been establishing companies around the world for nearly three decades. We have engaged in client legal and corporate services, including opening companies, offshore trusts, getting financial licenses, and accounts in dozens of countries around the world. Get in touch to find out more.

Offshore Protection

Join thousands of satisfied clients who have experienced the Offshore-Protection advantage for more than 25 years. When you purchase any of our offshore company formation products, you'll get FREE support from our lawyers to help answer your overseas company day-to-day management questions.

Start the Incorporation process with Offshore Protection today. Order a Cayman Islands Exempt Company with or without a bank account. For more information, be sure to contact us for a free Tailor Made Offshore consultation.