World class financial centre and a hotbed for investments
The Cayman Islands broke its administrative links with Jamaica and politically chose to become a direct dependency of the British Crown, in 1962. Soon, the tax structure on Grand Cayman was completely restructured into an offshore banking centre and legal tax haven, and it rapidly transformed the island into a financial dynamo.
The Cayman Islands is one of the world's most popular destinations for investment funds to organise for tax purposes. Around 85% of the world's hedge funds are domiciled in the Cayman Islands, enabling the jurisdiction to outrank competing offshore centres (BVI, Bermuda and Jersey among them) as the top spot for hedge funds.
The Cayman Islands consists of Grand Cayman, Cayman Brac and Little Cayman located just 480 miles south of Miami, Florida.
The two "Sister Islands" of Cayman Brac and Little Cayman are located about 85 miles (135 km) northeast of Grand Cayman.
There are four types of company that are usually registered under the Companies Law:
Companies limited by shares are commonly used although the law permits companies limited by shares, companies limited by guarantee and unlimited companies. Shelf companies are available but are unusual.
Ordinary companies are formed in a similar manner as in England. The Memorandum of Association should be filed to the registrar of companies, stating the name of the registered office; the objectives and the authorised share capital. The company may operate with one shareholder, who is required to hold at least one shareholder meeting every year. The company either charts its Articles of Association or implements the standard table. It should have at least one director. An annual report must be filed with the registrar of companies, listing the shareholders and officers.
Activities of an Exempted Company shall be conducted outside the Islands although it may hold investments both within and outside the islands.
Exempt Companies may obtain a guarantee from Government exempting it from any taxes for a period of 20-years. There is no need of shareholder meetings and they do not maintain a list of the annual shareholders. It need not include the suffix of 'Limited or Ltd.' in its name.
Incorporation & Registration will take about 48 hours. Any one or more persons associated for any lawful purpose may, by subscribing their names to a memorandum of association, and otherwise complying with this Law in respect of registration, form an incorporated company, with or without limited liability.
The law states that, the memorandum of association shall contain -
There are no taxes on income, capital gains or sales of real estate. Neither are there any death duties nor inheritance or gift taxes.
Capital Gains – No
Other Taxes – Income derived from stamp duties, custom duties, business licences and fees
Stamp Duties –
|Stamp Duty||Tax Payable|
Real estate in all areas within the Cayman Islands
7.5% of the consideration or market value, whichever is higher
Conveyance or transfer of immovable property
4% of the consideration if the transferee is a Caymanian
6% of the consideration in any other case
Mortgage of property
1% to 1.5% of sum secured
The Cayman Islands does not have a tax treaty with any country. Income received in the Cayman Islands from abroad may be subject to taxation in the country of origin.
The Cayman Islands is a leader in the global financial market, ranks number one in the Specialised Financial Centres.
Cayman Islands follows Common Law system based on English law. Two forms of Cayman Islands companies exist: The Exempted & the Non-Resident. The license fee of the Non-resident is lesser compared to that of the Exempted Company. Exempted Company names doesn’t need to end with the suffix ‘Limited’ and they may apply for a 20-year tax exemption certificate, further enhancing their tax-exempt status. Also, Chinese characters may be used in the Company name as long as its translated name is provided.
The Companies law was updated, revised and consolidated in 2004, 2007, 2010, 2011 and 2013. The most recent revision has initiated a number of augmentations and states that, - “Authority” means the Cayman Islands Monetary Authority established under section 3(1) of the Monetary Authority Law (2011 Revision), and includes a person acting under the Authority’s authorisation; “bearer share” means a share in the capital of any company incorporated in the Islands which -
To any management entity registered in Cayman as a company or partnership, or as a registered foreign company or partnership (a "Cayman Manager"), the Securities Investment Business Law ("SIBL") applies. Applications for a licence are made to the Cayman Islands Monetary Authority (“CIMA”) in the prescribed form and annual licence fees range from US$ 2,500 to US$ 10,000 depending on the category of licence required. These categories are:
Anyone who conducts or purports to conduct securities investment business without the appropriate licence is guilty of a criminal offence. The penalties on conviction are severe: up to a year’s imprisonment and a fine of US$ 125,000 and, in the case of a continuing offence, a fine of US$ 12,500 for each day during which the offence continues.
“Regulatory laws” means any one or more of the following:
The law in this area has been modified so as not to impose unnecessary registration burdens on foreign companies in certain cases whilst extending their eligibility in others. Specifically-
Restrictions on trading – Cannot trade within the Cayman Islands; own real estate in the Cayman Islands; Cannot undertake the business of banking, insurance business or mutual fund business unless licensed; Cannot solicit funds from the public.
An annual fee is levied on all companies based on its share capital. In addition, licensed financial service companies pay annual licence fees, dependent on the type of business. All local businesses require a licence and annual payments are made dependent on the type and size of the business. These fees would not normally affect offshore companies and businesses.
For exempt companies:
Cayman Islands allows a maximum duration of 6 months visa free stay. Setting up a Cayman offshore company in Cayman Enterprise City’s technology park can cost-effectively establish a genuine physical presence offshore with staff on the ground, thereby solving your H-1B visa problems and providing benefits from Cayman’s tax-free regime.
To work in Cayman you require a work permit. A two-year permit for a foreign auditor can usually cost $16,500 while large firms may pay more than $21,000 for a visa for financial controllers. The permanent citizenship can be availed if you have resided at the Caymans for up to 10 years.Compare Jurisdictions Talk to a consultant