For those who are thinking about forming a company – or companies – in the Cayman Islands, it’s important to know that there are Cayman Islands corporate services available to assist with all procedures and processes. These services can arrange for registration of a Cayman company within 48 hours of receiving instructions, provided all regulatory and compliance requirements are met.
The process of incorporating in the Cayman Islands is fairly straightforward. There are three types of commonly registered companies in Cayman under the Companies Law: ordinary resident company, ordinary non-resident company, and exempted company.
Ordinary resident company
An ordinary resident company is usually formed for the purpose of carrying on local business in the Cayman Islands. In addition to being subject to the Companies Law, it is also subject to the terms of the Local Companies (Control) Law 1995, which requires licensing, and annual submission of a list of shareholders. Registration fees are payable upon incorporation and annually.
Ordinary non-resident company
An ordinary non-resident company is subject to the same rules as a resident company, but it is not allowed to conduct any business within the islands. This type of company, or the exempted company, is the typical choice for offshore operations. The Financial Secretary will grant a certificate of non-residence if satisfied that the company does not trade onshore, and does not intend to trade onshore. The company is then relieved of the licensing requirement.
The normal minimum capital requirement is KYD42,000, and the minimum capital duty levied by government on incorporation of a non-resident company is KYD600. The duty is 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. Financial records must be maintained, though no audit is necessary, and there are no filing requirements.
Ordinary non-resident companies can apply to convert to become exempted companies.
A Cayman Islands exempted company differs from a non-resident company in several ways. An exempted Cayman Islands 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 authorised depositary; an exempted company does not need to file a list of shareholders annually, nor does it have to keep such a list.
A Cayman Islands exempted company, the typical choice for investment vehicles, may obtain a Certificate of Tax Exemption, such as against any future Cayman taxation.
Benefits of offshore company registration in the Cayman Islands include high standards of transparency and compliance. In addition, the Cayman Islands’ are known for political stability, the absence of direct taxation and foreign exchange controls, and local availability of world-class professional advice and services.
Cayman Islands company incorporation can be handled seamlessly and efficiently for clients locally and across the globe, so the best way to start is by contacting professional services providers.