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How to incorporate a company in the Cayman Islands?

The Cayman Islands are a small island jurisdiction in the Caribbean Sea, consisting of three small pieces of land 240 kilometres south of Cuba. The islands are currently considered an overseas territory of the United Kingdom.

The Cayman Islands economy is based on the tourism business. According to some estimates, up to 2 million foreign tourists visit the jurisdiction’s first-class ocean beaches and picturesque lagoons each year.

Foreign entrepreneurs are interested in these islands mainly as a territory for registering an offshore company. It is not only a convenient tax haven for international business, but also one of the world’s largest financial centres.

8 arguments in favour of registering a company in the Cayman Islands

  1. The Caymans is the only offshore zone on the planet where an entrepreneur has access to such a huge range of financial instruments and services. This jurisdiction is at the same time:
    • One of the leading international banking centres;
    • The location of offshore hedge funds;
    • The second largest captive insurance centre;
    • A global leader in structured finance.
  2. The Cayman Islands is a convenient tax haven with no direct corporate or personal income taxes and no property tax.
  3. The Cayman Islands has a good business reputation. The jurisdiction’s financial market regulatory regime meets strict international regulatory standards. In the Caribbean region, the Caymans are a recognised leader in the fight against money laundering.
  4. High level of confidentiality. Personal data of founders and directors of offshore companies are not publicly available. For security reasons in the Cayman Islands, you are free to use the services of nominees.
  5. The opportunity to conduct profitable business directly from the territory of the Cayman Islands. For this purpose, local authorities open free economic zones, abolish import duties, facilitate immigration of valuable specialists from abroad, and significantly reduce operating costs for small and medium-sized businesses.
  6. The absence of currency control and any restrictions on international financial transactions greatly simplifies the settlements of a Cayman-registered company with customers and suppliers.
  7. Simple and fast registration of a new company. To open your company in the Cayman Islands, you do not need to freeze a significant amount of money in special bank accounts, collect piles of papers and wait for weeks for the authorities to decide. With the help of our registration agents, you will open a company in the islands in less than a week, without leaving the comfort of your own home!
  8. The Cayman Islands have exceptional political and economic stability. Add to that government support and a friendly business community. It’s no wonder that world-renowned banks and law firms, digital industry leaders and major trusts have incorporated in the Caymans.

What type of organisation should I choose to register my business in the Cayman Islands?

Here they provide local and foreign entrepreneurs with a wide range of legal forms to formally register a business. In our brief overview, we will look at only the most common business structures and go from simple to complex — from operating as a sole proprietor to corporate structures for international business.

Individual entrepreneur / Sole trader

The most flexible form of doing business in the Cayman Islands is sole trader. Sole trader status is suitable for a small private enterprise that has similarly small financial obligations in the course of its business activities.

In the Cayman Islands, individual entrepreneurs are not burdened with excessive reporting, close attention of regulatory authorities and excessive costs. However, several formalities for registration will have to be completed and small annual expenses will still be incurred. For example, payment for a commercial licence.

An individual entrepreneur is personally liable for any debts incurred by the business. He or she may carry out business activities on his or her own or employ staff.

In order to trade and do business in the Islands, an entrepreneur will need to apply for a T&B licence. As this type of commercial licence is not available to foreigners, only citizens or permanent residents of this jurisdiction can operate as a sole trader in the Cayman Islands.

Business partnerships in the Cayman Islands

Partnerships are chosen by those entrepreneurs who plan to launch a joint business, but would like to avoid all the formalities and costs associated with the registration of a corporation. In Cayman, partnerships are not as strictly regulated by law as conventional companies. Partnership firms have a great deal of flexibility in the distribution of responsibilities and profits between the founders. A minimum of two founders will be required to register a partnership in this jurisdiction.

The Territory of the Cayman Islands operates:

  • Partnerships;
  • Limited Partnerships;
  • Exempted limited partnerships;
  • Limited Liability Partnerships;
  • Overseas limited partnerships.

Partnership / General Partnership / Partnership

A general partnership may be formed by two or more members, the so-called “general partners”, who take an active part in the management of the business and are fully, jointly and severally liable for any debts incurred by the partnership in the course of its business activities.

In such a firm, the only restrictions on the distribution of profits and the withdrawal of capital are solely those agreed between the partners. Partnerships in the Caymans are registered by professional service providers such as lawyers, accountants, secretaries and managers.

Limited Partnership / Limited Partnership / LP

A minimum of two participants will be required to register, which can be either individuals or legal entities.

All partners in an LP fall into 2 categories:

  1. General or general partners who are liable with personal assets for the debts of the limited partnership. On the other hand, they manage the organisation and have a say in the distribution of profits and withdrawal of capital.
  2. Limited partners will lose only their contribution to the total assets of the LP if the firm goes bankrupt. Such partners must not participate in the management of the business and their rights to share in the profits are limited.

Limited Partnership in the Caymans does not provide a high level of privacy to the overseas entrepreneur because under the current rules the general partners not only apply for registration, but also publish a declaration of partnership in the local newspaper. This document provides comprehensive information about the registered LP:

  • Limited Partnership Title;
  • Scope of activities and principal place of business;
  • Names and residential addresses of all partners;
  • The amount of the authorised capital;
  • The amount of the partnership interest of each limited partner.

Foreign participation is not regulated in registered partnerships in the Islands. The general partner may be a foreign businessman or company. In order to trade directly in the Cayman Islands, partnerships with significant foreign ownership (more than 40%) must obtain a commercial licence.

Exempted Limited Partnership / Exempted Limited Partnership / ELP

This new legal form for registering a business in the Cayman Islands came into existence in 2018. ELPs are distinguished from other types of partnerships in that they cannot do business with Cayman residents unless it is necessary to do business overseas. Other key features of exempt partnerships are:

  • The Cayman-registered ELP and its constituent partners are exempt from income tax, capital gains tax, inheritance tax and property taxes;
  • The incorporator of an exempt limited partnership may be:
    • An individual in the status of general partner;
    • An individual in the status of a limited partner;
    • A company with unlimited liability;
    • Limited Liability Company;
  • The data on the exempted partnership is transferred to the Registrar and placed in the public domain. Partners need to provide the following information and documents:
    • The name of the partnership to be established;
    • Scope and location of the partnership’s business activities;
    • The term of the partnership agreement;
    • The name and address of each partner;
    • A statement that the partnership will not do business with the people of the Cayman Islands (except to the extent necessary for business outside that jurisdiction).

Each year the Exempted Limited Partnership prepares and submits a tax return and pays a compulsory levy.

Limited Liability Partnership / Limited Liability Partnership / LLP

This type of partnership in the Cayman Islands is a separate legal entity. This means that liability for the debts of the LLP extends solely to the assets of the partnership and does not apply to the other assets of the founders.

The members of such a partnership are liable, but only to the extent of the value of their contribution to the capital of the enterprise. They are neither personally nor jointly and severally liable for the acts or omissions of the other partners (unless the debts were incurred as a result of the negligence of one of the founders).

LLPs in the Caymans incorporate to conduct business directly in the place of incorporation or well outside the islands.

Foreign Partnership

Foreign-registered limited partnerships and limited liability partnerships can also obtain formal registration in the Cayman Islands under foreign partnership status.

Current laws permit a foreign limited partnership to be the general partner of a Cayman-registered ELP.

All foreign partnerships in this jurisdiction are required to pay an annual fee and promptly inform the Registrar of all changes in the firm.

Corporate structures in the Cayman Islands

More complex legal forms of doing business here are different types of companies. The uniqueness of this jurisdiction is that a foreign entrepreneur is given a huge choice of corporate organisations suitable for any type of commercial activity. Imperial & Legal specialists have prepared a short overview covering only the most popular types of companies for overseas business.

To learn more about corporations in Cayman and to find a solution that fully meets your needs, contact our experts for a consultation.

Exempted Company

If the firm will be doing business mainly abroad, the best solution for a foreign entrepreneur is to register an exempt company.

In such an organisation it is not necessary to keep a register of shareholders, which will then be published in the public domain. This ensures a high degree of confidentiality.

Exempted companies do not have to hold a general meeting of shareholders in the Cayman Islands every year.

The owners of an Exempted Company may amend the constitutional documents without any restrictions but must notify the Registrar of such amendments in a timely manner.

An exempted company may issue shares with or without par value. The authorised capital of such a company may be calculated in any currency or even in several currencies.

The annual reporting of such a company is maximally simplified. The registrar is provided with one short report on the current state of the exempted company.

Cayman distinguishes between 2 types of exempted companies:

  • Limited Duration Company / Limited Duration Company / LDC. In such a company the liability of shareholders for debts extends only to their share in the share capital. The special status of an LDC allows it to operate as a partnership in certain jurisdictions and receive certain tax benefits;
  • The life of a limited company does not exceed 30 years, although it can be dissolved earlier by resolution of the founders;
  • Segregated Portfolio Company / SPC. This type of exempted company allows to separate assets and liabilities in the form of separate portfolios of shares (in some countries such portfolios are called “cells”) from the authorised capital of the company, as well as other portfolios. Each portfolio within such a company is not a separate legal entity.

Limited Liability Company / Limited Liability Company / LLC

This legal form is also perfect for registering an offshore company that conducts its main business activities outside the Cayman Islands. The liability of LLC founders is limited only by the amount of their investment in the company, as the limited liability company is a separate legal entity.

Interestingly, LLCs registered in the Caymans have no authorised capital. But to become a founder of such a company, it is necessary to buy a share in it. The director for the management of a limited liability company can be its owners or hired managers.

To open an LLC, you need to pay the registration fee and send the Registrar an application signed by the founders and certified copies of the statutory documents.

You will need to submit a regular annual report and pay a special fee.

Non-Resident Company / Non-Resident Company

A non-resident company is a standard company that has been granted non-resident status upon application to the Minister of Finance through the Registrar. The basis for non-resident status is a decision not to carry on business in the Cayman Islands. A non-resident company may buy and sell shares and interests in exempt companies and foreign corporations, but its activities in the Cayman Islands are limited to the needs of overseas business only.

Such firms should:

  • Have a registered office in the Cayman Islands;
  • Maintain local office operations;
  • Maintain a register of former and current founders;
  • Submit an annual report to the Registrar with information on the promoters, directors and the amount of paid-up authorised capital.

A non-resident company may convert into an ordinary resident company or an exempted company.

Special Economic Zone Company / Special Economic Zone Company / SEZC

Such a company is registered to enable the entrepreneur to do business in one of the Cayman Islands Special Economic Zones. If you already have an exempt company in the Cayman Islands, it is possible to re-register it as a SEZC. The SEZC Memorandum of Association must state the intention to do business in the SEZ.

Overseas Company / Overseas Company

An overseas company is a corporate structure established overseas and incorporated in the Cayman Islands so that foreign entrepreneurs can transact, own land or act as general partners in exempt limited partnerships in that jurisdiction.

Taxation of companies in the Cayman Islands

All companies incorporated in this territory do not pay direct taxes on profits, capital gains, real estate and salaries paid to employees. There is no VAT, sales tax or service tax in the Caymans.

If your firm imports any goods directly into the islands, import duty will be charged, which ranges from 22 to 27 per cent in the territory.

A stamp duty of 7.5% of market value is payable on transfers of ownership of immovable property in the Cayman Islands, or on transfers of shares in land holdings registered in this jurisdiction.

Does this mean that Cayman-registered companies and partnerships are completely free from any regular payments to the government?

No. Each business organisation registered in this jurisdiction pays a small amount each year when it files its next return. The amount of this payment depends on the type of company or partnership.

To carry out commercial activities in several areas you will need to obtain a state commercial licence, the annual renewal of which will also incur some costs.

To find out the exact amount of money you will have to spend on running a firm in the Cayman Islands, contact Imperial & Legal for advice.

Company registration process in the Cayman Islands

You can quickly and relatively inexpensively register your business in this jurisdiction withthe help of Imperial & Legal consultants. The procedure of company registration in the Cayman Islands can be divided into several stages.

Step 1: Preliminary consultation

First, our specialists meet with the client to get an idea of the structure of the future business and the tasks that will be solved with the help of the company registered in Cayman. We practice an individual approach, so we consider all the requirements and wishes of the businessmen who have approached us.

Based on the information we receive from you, we choose the best corporate structure to meet your business needs: an exempted company, a limited company, a non-resident company or simply decide to incorporate an existing foreign company in the Islands.

Step 2: Choosing a suitable name

A seemingly insignificant step can turn into a disaster if the name you like does not suit the Cayman Islands General Registry representative and the application for registration is rejected.

Our staff will scrutinise the name you come up with for your company to ensure that it meets all the requirements of the authorities before it is entered into the statutory documents.

Step 3: Preparation of company documents

The following documents must be prepared for successful registration:

  • Application for registration, where all information about your company is entered;
  • Memorandum of Association and Articles of Association (only required for the registration of ordinary companies, exempted companies and limited companies).

It is customary for an entrepreneur to appoint at least one director to their firm at this stage. Those businessmen who simply wish to register their foreign company in the Caymans will need a reliable representative in the islands, which Imperial & Legal can provide. Our staff will also undertake the drafting of the articles of association and prepare the application for registration.

Step 4: Official registration

Once everything is ready, our specialists pay the registration fee and send the application for company registration. As CIGR has a convenient website, the whole procedure is done remotely and does not require your presence on the islands.

It takes 3 to 7 working days for the authorities to decide on your application. Since our experienced specialists assisted you at each stage, in less than a week you will be the happy owner of your own company in the Cayman Islands!

Step 5: Further co-operation

As a rule, we continue our fruitful co-operation with businessmen who have applied for assistance after a positive response from the Registrar is received.

We can help you obtain commercial licences and permits, advise you on KYC checks with your local bank and advise your staff when it comes time to send your first declaration to the Registrar in January. Whatever issue you are dealing with in Cayman, Imperial & Legal will provide you with reliable support.

Frequently asked questions about company registration in the Cayman Islands

Is it necessary to pay the authorised capital to register a company in the Cayman Islands?

The government of this overseas territory does not require entrepreneurs to pay for the authorised capital of their company. Moreover, in the Caymans, there are not even minimum capital requirements for different types of companies.

What amount will a businessperson need to pay the registration fee?

Imperial & Legal usually already includes a fee in the cost of its services. Payment is made by our staff before the company registration application is submitted.

The amount you will pay for a start-up application depends on the type of corporate structure.

Company typeRegistration fee
In local $In US $
Exempted company732882
Non-resident company365440
Limited Liability Company732882
Foreign company1 2201 470

What advantages does registration in the Free Economic Zone bring to a company?

Such a company can carry out commercial activities without any licences and additional permits not only outside the jurisdiction, but also directly inside the economic zone.

All regulatory costs associated with operating your company in the Cayman Islands free economic zones are significantly less. Moreover, for the convenience of overseas entrepreneurs, they are usually bundled into one small payment.

If you open an existing office there, you will have a much easier time obtaining work visas for foreign employees than those entrepreneurs who operate in the Caymans outside the free economic zone.

Foreign companies in free economic zones can import the equipment, marketing materials and consumables they need for their operations without any import duties.

What is the best business for a company in the Cayman Islands Free Economic Zone?

The current promising areas of focus are:

  • Internet and digital technologies;
  • Media, including internet broadcasting, as well as film and television;
  • Raw materials trading;
  • Investments and work on the stock market;
  • Biotechnology, modern food production;
  • Green energy and nature-saving technologies;
  • Sea and air transport.

What types of commercial activities are licensed by the Government in the Caymans?

Trade and business in the islands

If your company is going to do business directly in the Cayman Islands, the Trade and Business Licensing Board must first ascertain whether your company needs to have a presence in the market. This step can be avoided if more than 60 per cent of your company is owned by residents of this wonderful jurisdiction.

A commercial licence will be required if you intend to engage in retail, buying and selling property, hotel or restaurant business, maintenance, and passenger or freight transport.

Finance and insurance

A foreign company must obtain a licence in accordance with the requirements of the regulations if it operates in the field:

  • Banking. This includes banks (including development banks), money transaction businesses, etc.;
  • Fiduciary services, be it trust companies, professional management companies and corporate service providers;
  • Insurance (insurance managers, agents, sub-agents, brokers and representatives);
  • Investments in securities through brokerage firms, dealers, brokers, consultants and securities managers.

What information do I need to provide to register a foreign partnership in the Cayman Islands?

To formally register an overseas LP or LLP in Cayman, foreign entrepreneurs will need to provide the following information:

  • Name of partnership;
  • The term of the partnership agreement;
  • The country in which the partnership was established;
  • If the foreign partnership is a separate legal entity, a document should be prepared with the full names and residential addresses of all partners in the partnership and other persons with significant control;
  • The registered office of the partnership in the country of incorporation;
  • The names and addresses of persons permanently resident in the Cayman Islands who have been authorised to receive and process official correspondence (notices, requests, etc.);
  • Names and residential addresses of all general partners.

Tired of getting general advice?

We will work with you to find a customised solution for your immigration, second citizenship, business, tax and other needs.

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