The Cayman Islands, known simply as Cayman by locals, is a British Overseas Territory in the Caribbean. It is located south of Miami and takes only a few minutes flight from there. The Cayman Islands comprises three islands, of which Grand Cayman is the largest. The capital of the Cayman Islands is George Town, with a population of around 40,000 inhabitants.
Her Majesty the Queen is the head of the state, and the local Governor represents her interests in the islands. The Governor grants royal assent to bills adopted by the Cayman parliament. It should be noted that the UK government has significant influence over legislative and political matters in the Cayman Islands.
The Cayman Islands is well known for being the most successful offshore financial centre in the world. It is also one of the oldest, with offshore services and legislation having first emerged on the islands in the late 1950s. Nowadays, the Cayman offshore financial centre maintains its leading position among global financial centres. The jurisdiction is ranked number one for establishing offshore funds and has developed world-class offshore banking services with many top-rated banks located in the region.
The Cayman Islands is a tax haven where no taxes are levied on corporations and individuals. The only applicable tax on the islands is a stamp duty, which is usually only a nominal amount for most documents.
There are also various import duties for goods imported to the islands, but this does not have any impact on the offshore financial and hedge fund industries.
A Cayman Islands company is basically tax-free on worldwide profits or any capital gains. Any transactions involving shares and payment of dividends are not subject to tax in the Cayman Islands. In addition, there is no corporate income tax, withholding tax or capital gains tax. Instead, Cayman companies pay a fixed government fee that is a part of the annual fees levied by service providers.
Individuals residing in the Cayman Islands can also benefit from tax-free status. There is no personal income tax, estate or inheritance taxes, or any tax on gifts.
Such a taxation system can work to the advantage of those who are doing business in the Cayman Islands, or who have chosen to arrange an estate planning or asset protection structure in the islands. Since there is no corporation tax, a Cayman Islands exempted company is not obliged to file tax returns.
No value-added tax is applicable to a Cayman Islands offshore company.
The official currency of the Cayman Islands is the Cayman Islands Dollar (KYD). There are no currency exchange controls in the Cayman Islands.
|Cayman Islands Dollar (KYD)
|Capital gains tax
The Cayman Islands legal system is based on English common law and equity principles. The Legislative Assembly adopts all laws, and judicial decisions in the Cayman Islands embody a substantial part of local case law. English law is not directly applicable in the Caymanian courts. However, English case law has significant influence and can be referred to in the courts.
Cayman Islands corporate law consists of two main legal documents: Companies Law (2018) and Limited Liability Companies Law (2016). The Foundation Companies Law (2017) is an addition to the main corporate legislation, which establishes a separate type of company, the Cayman foundation company.
In total, it is possible to incorporate four different types of companies in the Cayman Islands company registry. More broadly, Cayman Islands legislation allows for the incorporation of up to eleven variations of these companies, including segregated portfolio companies, not-for-profit associations, limited duration companies, etc. Such variations make setting up a company in the Cayman Islands a perfect choice for tailoring an offshore company to very specific needs.
The following laws regulate the Cayman Islands offshore industry:
The Cayman Islands should be considered as one of the primary jurisdictions for offshore company formation. It has a long-standing reputation as the leading offshore jurisdiction.
A Cayman Islands offshore company is well known as the best solution for funds, especially in the US. However, it is also suitable for all other types of common offshore activities. Protective offshore trust legislation allows the benefits of exemplary fiduciary services to be combined with the flexibility of corporate law. In addition, the no-tax environment combined with British Overseas Territory status makes offshore incorporations in Cayman particularly attractive.
There are numerous high-quality fiduciary service providers, accountants, law firms, banks and insurance companies. Of the fifty largest banks, forty have branches in the Cayman Islands. The Cayman Islands registry is very efficient and professional, which also promotes the jurisdiction. As a result, Cayman Islands incorporation usually only takes one to two working days. Astra Trust will gladly assist you with the process of company registration by providing efficient and prompt services.
A Cayman Islands exempted company enjoys a high degree of privacy. The register of directors and shareholders is closed for public inspection. The same applies to the register of beneficial owners, which should be filed in the centralised register kept by the Cayman company registry. These registers are only accessible to the designated public authorities of the Cayman Islands and the United Kingdom and are not available to the public.
According to Cayman Islands legislation, it is possible to establish the following types of Cayman offshore companies:
The most common type of company incorporated in the Cayman Islands is the Exempted Company. In turn, the Exempted Company can be divided into the following subtypes:
Astra Trust can quickly and cost-effectively incorporate a Cayman company and open an account. Other services such as a local director and nominee shareholders are also available. We have extensive experience in offshore incorporations of Cayman limited companies.
A Cayman offshore company is the best option for the following business activities:
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To incorporate an offshore company in the Cayman Islands, the following CDD documents are required:
Cayman Islands company formation fees include the following services:
After your Cayman Islands offshore company formation, you will receive the following Cayman company documents:
Other documents depend on the services ordered.
According to the Cayman Islands Company Law, 2021, no company shall be registered by a name that –
It is forbidden to register a company with the following names that –
A company’s dual foreign name shall only be entered in the register of companies if its translated name conforms with the abovementioned requirements.
After incorporation, a unique Cayman Islands company registration number is granted to the company by the Registrar.
The minimum number of directors of Cayman Islands exempted companies is one. Directors can be individuals or corporates of any nationality and residency.
The board of directors meetings of a Cayman Islands exempted company by law can take place anywhere in the world.
Shareholders of a Cayman Islands offshore company can be individuals or corporations of any nationality and residency. The minimum number of shareholders is one.
Upon incorporation of your Cayman Islands offshore company, it is possible to appoint a local director and a nominee shareholder. Astra Trust can assist you in all matters relating to Cayman Islands registration, appointment of nominees and opening of offshore bank accounts.
The share capital of a Cayman Islands offshore company can be of any value and currency as stated in the Memorandum and Articles of Association.
The standard authorised share capital can be USD 50,000 with a par value of USD 1 each. In this case, the issued share capital can be one share of any par value up to USD 50,000 or 50,000 shares of par value of USD 1 each.
The authorised share capital of the Cayman Islands company can be both par value and no par value.
A Cayman Islands exempted company can issue different classes of shares, as stated in its Memorandum of Association.
Bearer shares are prohibited from being issued in the Cayman Islands.
The Cayman Islands is considered a highly confidential jurisdiction. As of now, it’s not possible for members of the public to find out who owns a Cayman Islands company.
The registers of directors, shareholders and beneficial owners are stored at the registered office by the registered agent of the Cayman Islands exempted company and are not publicly accessible.
The register of directors must be submitted to the Cayman Islands company registry. The register of beneficial owners is required to be submitted to the Cayman Islands government’s centralised beneficial ownership platform. Neither of these registers is open to the public, meaning that sensitive information is only available to government authorities.
The privacy of a Cayman Islands offshore company can be further enhanced by using the services of a director and a nominee shareholder. Beneficial ownership can be structured through trusts or foundations.
If you would like to know more about Cayman Islands company formation, please contact the Astra Trust team to receive more detailed information and a free initial consultation.
Economic substance requirements are applicable in the Cayman Islands.
The entities relevant to these requirements are all companies and partnerships incorporated in the Cayman Islands, except for the following list of companies registered in the Cayman Islands:
For companies not listed above, the economic substance requirements apply if they conduct one or more of the business activities listed below:
Relevant activities list does not include investment fund business.
All companies not engaged in business activities as described above are not subject to the economic substance requirements in the Cayman Islands. If you would like to know more about the economic substance requirements in the Cayman Islands, please contact Astra Trust’s experts.
A Cayman Islands exempted company has no financial or tax reporting obligations in the Cayman Islands.
Business Activity Restrictions
Requirements for Directors
Requirements for Secretaries
Requirements for Shareholders