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.
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.
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.
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:
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.
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:
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:
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.
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:
Each year the Exempted Limited Partnership prepares and submits a tax return and pays a compulsory levy.
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-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.
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.
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:
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.
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:
A non-resident company may convert into an ordinary resident company or an exempted company.
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.
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.
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.
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.
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.
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.
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.
The following documents must be prepared for successful registration:
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.
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!
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.
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.
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.
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.
The current promising areas of focus are:
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.
A foreign company must obtain a licence in accordance with the requirements of the regulations if it operates in the field:
To formally register an overseas LP or LLP in Cayman, foreign entrepreneurs will need to provide the following information:
We will work with you to find a customised solution for your immigration, second citizenship, business, tax and other needs.
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