Cayman Islands Offshore Company Formation
- Last updated on . Written by Offshore Protection.
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
Table of Contents:
- Advantages Of A Cayman Islands
- Top Uses
- Key Corporate Features
- Company Product Package
- How To Setup?
- Corporate Taxation
- Economic Substance Law
- Corporate Details
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
Get a Consultation & Start Your International Plan
- 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
|Cayman Islands Exempt Company||Corporate Details|
|Type of Entity||Exempt|
|Type of Law||English Common Law|
|Governed by||Companies Law 1961 |
Companies Law 2007 Revision
Companies Amendment 2009, 2011, 2013
|Registered Office in Belize||Yes|
|Shelf company availability||Yes|
|Our time to establish a new company||two business day|
|Minimum government fees (excluding taxation)||USD $854|
|Access to Double Taxation Treaties||No|
|Share capital or equivalent|
|Standard currency||US Dollar |
|Minimum paid up||No minimum|
|Usual authorized||Any amount (USD $50,000 optimal)|
|Bearer shares allowed||Yes|
|No par value shares allowed||Yes|
|Publicly accessible records||No|
|Location of meetings||Anywhere|
|Corporate directorship allowed||Yes|
|Publicly accessible records||No|
|Corporate shareholder allowed||Yes|
|Location of meetings||Anywhere|
|Local or qualified||No|
|Requirements to prepare||Yes |
|Requirements to file accounts||No|
|Publicly accessible accounts||No|
|Recurring Government Costs|
|Minimum Annual Tax||USD $854|
|Annual Return Filing Fee||USD $1250|
|Requirement to file annual return||Yes, minimal requirements|
|Migration of domicile permitted||Yes|
Company Product Package
- Government Registration Fee (First year)
- Registered Office Address (First year)
- Registered Agent Services (First year)
- Company Secretarial Maintenance
- Certificate of Organisation
- Articles of Organisation
- Minutes of First Organisers Meeting
- Ownership Certificates
- Register of Members
- FREE Phone and/or email consultations
How to Setup?
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
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. 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.
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.
Safeguard Your Assets With the Strongest Multi Jurisdictional Asset Protection Structure in the World
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.
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.
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.
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.
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.
There are no requirements for a secretary for a company, though it is customary to appoint one. A director can be the company secretary.
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
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.
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.
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.
There are no audit requirements for a Cayman Island Exempt Company.
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
Why Do Businesses Register A Company In the Cayman Islands?
Businesses register a company in the Cayman Islands because international corporate structures provide asset protection and tax reduction possibilities that are found only in non-resident legal structures. The Cayman Islands offers both a safe and stable jurisdiction with a favorable tax regime for non-resident companies giving companies a business-friendly corporate environment.
The government and regulatory bodies seek to attract regional and international businesses by providing business-friendly policies to attract investors and entrepreneurs into the country.
How Much Does It Cost To Start A Company?
Cayman Islands company registration costs vary, which is why we do not include them on our website. Prices depend on the legal and corporate services required, as well as secretary, auditing and signatory services which are often needed (though not always) if you are incorporating a non-resident company.
Registration and incorporation fees for 1st-year companies vary anywhere from 1000-5000USD with 2nd-year fees ranging anywhere from 500-2000USD. However, even these figures are not always the case, as all of this depends on the services required, so beware of any service provider that states their fees exactly, as you will be disappointed in seeing that number change. Get in touch for a price quote.
Can I Open A Business Bank Account For My Company?
Opening a business bank account is definitely possible and is one of the main reasons why businesses open a foreign corporation in the first place. However, it often can be the most challenging part of any offshore incorporation process because of the requirements and documents needed in order to satisfy Anti Money Laundering (AML) and Know Your Customer (KYC) laws.
That being said, some jurisdictions are harder than others and we will assist you through the entire process.
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.
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.