How to Open a Business in the Cayman Islands |
Posted: December 26, 2019 |
The rules that govern setting up and running a Cayman Island business are smooth and simple to navigate. Thanks to its well-regulated financial services industry, the Cayman Islands now has the fifth largest banking sector in the world, while the number of active companies on the Cayman Islands company register exceeds well over 100,000. The Cayman Islands has more registered businesses than people! It is the leading jurisdiction for international hedge funds and a major player in banking, trusts, capital markets and fiduciary and other Cayman Islands corporate services. It is a respected business destination that provides a high level of trust thanks to its favourable business climate and close adherence to international tax regulations by the Cayman Islands Monetary Authority (CIMA), which has a stricter regime than many other offshore jurisdictions. Because the Cayman Islands are a British Overseas Territory, local laws are based on English law. This makes doing business through the Cayman Islands easy for business owners familiar with Commonwealth legal systems. Setting up global bank accounts for a business is also easy, with many internationally recognized banks providing corporate bank account services in the islands. The rules that govern company formation in the Cayman Islands are smooth and simple to navigate. You'll just need to register your company with the Cayman Islands Companies Registry, determine which type of business structure works for you, pay an annual fee and determine whether any taxes will apply to you. This can all be done in a few days with minimal paperwork. The three common types of registered companies in the Cayman Islands under the Companies Law are the Ordinary Resident Company, Ordinary Non-Resident Company, and the Exempted Company. An ordinary resident company is for carrying on local business in the Cayman Islands. Under the terms of the Local Companies (Control) Law 1995, an ordinary resident company requires licensing and annual submission of a list of shareholders. Registration fees are payable on incorporation and annually. An ordinary non-resident company has the same rules as a resident company, but is not allowed to conduct any business within the Cayman Islands. This, or an exempt company, is the usual choice for offshore operations. If the proposed Cayman Incorporation does not (and does not intend to) trade onshore, there is no licensing requirement. The normal minimum capital requirement is CI$42,000, with a minimum CI$600 capital duty on incorporation of a non-resident company (higher for companies with a greater capital base). Annual government fees apply thereafter. There are no restrictions on the location of general meetings or of directors or the secretary. Records of members, directors, mortgages and charges must be kept and financial records must be maintained, although no audit is necessary and there are no filing requirements. A Cayman Islands Exempt Company is the typical form of choice for investment vehicles and differs from a non-resident company in a number of ways: An exempted Caymans company does not have to use Ltd or Limited in its name; it may issue bearer shares in addition to registered shares, but they must be held by an authorized depositary; it does not need to file, or even maintain, a list of shareholders annually; it may obtain a Certificate of Tax Exemption (i.e. against any future Cayman taxation). The above is a very general overview of the subject. Seek specialist advice about your own specific circumstances and requirements before making any decision on incorporating in the Cayman Islands.
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