Cayman Islands Offshore Company Formation

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.

Table of Contents:

• Advantages of a Cayman Islands Offshore Company
• Top Uses
• Key Corporate Features of a Cayman Islands Exempted Company
• Company Product Package
• Requirements For Incorporation
• Cayman Islands Corporate Taxation on Offshore Companies
• Cayman Islands Economic Substance Law
• Corporate Details 

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 Offshore Company

• 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

Key Corporate Features of a Cayman Islands Exempted Company

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

Requirements For Incorporation

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 authorised 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

Cayman Islands Corporate Taxation on Offshore Companies

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 Cayman Islands Economic Substance Law

Apart of 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 is pertains to all entities formed in the Cayman Islands that are nonresident entities. 

All entities that are "overseas entities", whether an LLC on Private Company that take part in 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 authorised 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.

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 upon submission of incorporation documents. All information is held confidential with minimal personal exposure. 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 are also permitted although they must be held by an authorised depository.

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.

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.

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.

Language of Name

A company name can be in any language in the Latin alphabet including Arabic and Chinese if a translation is included.

Access to Double Tax Treaties

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

Annual Tax for Licence

Licence 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

Cayman Islands Exempt Company with 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.