Our Cayman Islands company formation consultants have efficiently helped clients to set up a company in Cayman Islands for many years now. The Cayman Islands Exempted Company is the most widely-used business form by foreign investors looking to do business in the British overseas territory. This company can carry out its activities outside the Islands, however, it may hold investments here.
Quick Facts | |
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Types of companies | Exempted Company Ordinary Resident and Non-Resident Company Foreign Company Limited Liability Company (LLC) |
Minimum share capital for Exempted Company | No minimum capital, however, registration & annual fees apply |
Minimum number of shareholders for Exempted Company | 1 |
Time frame for the incorporation (approx.) | 4 working days |
Corporate tax rate | – |
Dividend tax rate | – |
VAT rate | – |
Number of double taxation treaties (approx.) | – |
Do you supply a registered address? | Yes |
Local director required | No |
Annual meeting required | No |
Redomiciliation permitted | Yes |
Electronic signature | Yes |
Is accounting/annual return required? | Yes, a simple annual return for the Exempt Company |
Foreign-ownership allowed | Yes |
Any tax exemptions available? | – no corporate income tax, – no capital gains tax, – no payroll tax or other direct taxes |
Tax incentives | There are no tax incentives as there are no taxes on corporate income. |
The Islands were one of the traditional offshore jurisdictions alongside Bermuda and it is their longstanding tradition that continues to make them attractive to foreign investors worldwide. 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 fact that they were once part of the British Empire means that the current legal system is based on the English Common Law – another advantage for foreign investors.
In order to set up a company in Cayman Islands, you can choose the Exempted Company or the Non-Resident Exempted Company. The first business form tends to have a higher degree of popularity among foreign entrepreneurs because of its tax-exempt status.
The Cayman Islands exempted company offers a multitude of benefits, and this type of company is one of the primary reasons why the jurisdiction is chosen by many offshore investors. Below is a list of the most important advantages of the exempted company:
The Cayman Islands exempted company derives its name from a twenty-year guarantee that is will not be subject to taxes (the exemption, although there are no taxes for companies in the Cayman Islands at present).
A number of steps are mandatory for the incorporation of the Cayman Islands exempted company. Below, our team of agents lists the most important ones. For more information on each of these points, as well as personalized assistance during incorporation, please do not hesitate to reach out to us.
These requirements need to be observed when opening an offshore company in this jurisdiction. Our team offers complete company incorporation packages that observe these requirements. Moreover, foreign investors benefit from a fast-track incorporation, in most cases this being possible within one or two days after the receipt of the required documents.
A Cayman Island exempt company is required to pay a registration fee and an annual fee depending on its subscribed capital. Below, our team lists the capital values and the fees imposed by the Companies Register.
Please keep in mind that these fees can be subject to change. If you wish to register a company in 2022, our team will be able to provide you with information on the current fees, if they have been subject to any change, as well as other requirements.
Registration fee:
Annual fee:
Other fees are imposed by the Registry for different types of services. For example, an express service for issuing any type of certificate is usually $100. Penalties apply for failure to notify certain company changes as well as for other late filings. For example, investors in the Cayman Islands can expect to pay a penalty of $10 per day and $500 maximum for failure to file the increase in share capital documents (in addition to the fee for increasing the share capital of $400 for all types of companies).
Business owners who open a Cayman Islands exempted company will also have to keep in mind other fees, apart from those for registration and the annual fee. These can include the ones for Intellectual Property Registration, for those interested in this step. A trademark registered in the Cayman Islands has a validity period of 10 years and it can be renewed for up to six months after its expiry (with an application for restoration afterward). Examples of registration fees are listed below:
Our team can give you more details about the trademark application process if you need to know more before you register your exempted company.
Shelf companies or readymade companies are available for those foreign investors who wish to purchase a company that has already been incorporated.
The company can select a name that is either in English or in Chinese and the minimum share capital upon incorporation is 50,000 USD. There are no restrictions on the nationality of the company founders and shareholder and directors can be either individuals or other corporations. Annual fees or registration will apply, although they are not burdensome for investors.
A requirement for company formation in Cayman Islands is to have a registered office and a registered agent. All of the official communications from the relevant agencies will be sent to the company’s registered office located in the Islands. The location of the office is public and any individual can obtain the address after submitting a proper inquiry with the Registrar. Another requirement is that the office is clearly marked with the company’s logo or name. The address of the registered office can be changed by means of a Director’s Resolution and an approval from the Registrar to move the office is issued within 30 days from the date of the Resolution.
While it is not mandatory to appoint an officer, it is advisable to appoint a secretary for the company who will fulfill a set of administrative actions, including but not limited to making sure that the company submits all of the filings in due time.
The registered office and the registered agent services can be included in the special company formation packages offered by companies that provide incorporation services.
The company must submit a set of annual returns to the Registrar, however, the requirements are light and contain the following:
– a statement that there has been no change in the company’s constitutive documents, name, and objectives, other than the ones previously reported (if any).
– the operations of the company have been performed outside the Islands (for the most part and since the last filing).
– the company has not engaged in trading within the Islands, with a company or an individual.
We invite you to watch the following video on company formation in Cayman Islands:
Setting up a Cayman Islands company is a straightforward process and one that can take approximately three or four days, depending on the documentation that is required and whether or not investors provide the needed documents at once.
Businessmen interested in starting an offshore company in other jurisdictions, for example setting up an offshore company in Panama or in Belize, can receive assistance from our partners.
If you need to open a company in another country, such as USA, we can put you in touch with our local partners.
Company formation in Cayman Islands has numerous advantages, among which we mention:
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
If you have further questions about setting up a Cayman Islands company, please do not hesitate to contact our staff.