Cayman Islands is one of the few countries regarded as Tax Havens, i.e. an offshore financial center that has less stringent tax laws. The corporate laws governing Cayman Islands, attract international business and numerous offshore investors who choose to incorporate in their jurisdiction. As a result to its stable government and economy, foreign investors enjoys flexibility options and enjoy greatly from the many business opportunities. It has a strong and powerful banking system for offshore corporations which further encourages entrepreneurs from all over to register their businesses within its shores.
BENEFITS OF REGISTERING A COMPANY IN CAYMAN ISLANDS
There are quite a number of benefits of incorporating in Cayman Islands. Below are some of the benefits of registering your business in Cayman Islands:
- Fast and seamless registration process, the procedure takes within one to four working days provided all documents are available. This is because there is no requirement for government regulatory authority approval.
- The government has always been stable and the economy has remained strong due to its popular banking system, offshore corporations, and tourism.
- There is no obligation to deposit authorized capital in a bank or in escrow when incorporating a company in Cayman Islands.
- No shares transfer tax, there are no taxes or duty stamps for the corporate transfer of shares to third parties except for real estate investments.
- Incorporating a company in Cayman Islands with only one person is possible. That individual will then act as both the sole director and shareholder of the business.
- Businesses may merge with other corporations, either in the Cayman Islands or in other countries, such that the final merger can enable the corporation to exist in any jurisdiction. Nevertheless, merging corporations often choose to remain in the Cayman Islands jurisdiction due to the benefits they receive.
FORMS OF BUSINESSES IN CAYMAN ISLANDS
- Cayman Islands Offshore Company (Exempted Company): Is a type of company where the proposed activities of the company are to be carried out mainly outside of the Cayman Islands offshore.
- Cayman Islands Non-resident Company: this is the type of company that has been granted non-resident status through an application to the Minister of Finance through the Registrar of Companies and must state that the company does not intend to carry on business within the Cayman Islands. The company may deal in shares of exempted companies, foreign corporations and partnerships, but may only carry on such other business in the Cayman Islands as is necessary for the furtherance of its foreign business.
- Resident Company: An ordinary resident company is the type of company that carries on business within the Cayman Islands. Resident companies must maintain at their registered office, open for public inspection, a register of their past and present members. They must also report annually to the Registrar, giving the names and addresses of members, directors, and the amounts of paid-up capital.
- Partnership: Partnerships are registered relations which subsist between persons carrying on business in common with a view to profit, the Cayman Islands partnerships do not have separate legal personality. There are currently three types of partnerships that exist under the Cayman Islands Law namely Exempted Limited Partnerships, Foreign Partnerships and Limited Partnerships.
- Limited Liability Company: similar to an offshore company, a limited liability company may be registered where the proposed activities are to be carried out mainly outside of the Cayman Islands offshore. This type of company has separate legal identity therefore the members of the company cannot be held personally liable for the company’s debts or liabilities.
- Overseas Company: An overseas company also referred to as a foreign company is a company incorporated outside the Cayman Islands. Registration pursuant to Part IX of the Companies Law is necessary to enable overseas companies to hold land or carry on business in the Cayman Islands, or to act as the general partner of a Cayman Islands Exempted Limited Partnership.
- Special Economic Zone Company: this type of company is authorized to carry on business in a special economic zone pursuant to any Law in force in the Islands. Existing exempt companies may be re-registered as special economic zone companies. The memorandum of association of such companies is required to state the intention of carrying on special economic zone business. The name of the company must include “special economic zone company” or “SEZC”
- Unlimited Liability Company: In the case of an unlimited company the liability of all its shareholders or members is unlimited. Its members or shareholders have a joint, several and non-limited obligation to meet any deficiency in the assets of the company to settle outstanding debts in the event of the winding up of the company.
- Not for Profit Organization: this is the entity formed for the purpose of promoting commerce, art, science, religion, charity or any other useful object, and that it is the intention of such association to apply the profits, if any, or other income of the association in promoting its objects, and to prohibit the payment of any dividend to the members of the association. An association not for profit is not required to publish its name, or to send a list of its members, to the Registrar or to pay an annual fee.
This department oversees the registration, recording and administration of companies, partnerships, trusts, intellectual properties, NGOs etc. It also develops and implements policies and systems for all registers to ensure continued effective contribution to the financial services industry and the public.
REGISTRATION REQUIREMENTS FOR INCORPORATION IN CAYMAN ISLAND
Below are the key points to note before commencing registration in Cayman Islands:
- Company Name: Like every other business jurisdiction, it is important to search and confirm that the intended name isn’t similar to any existing company name in that jurisdiction as it will be denied. The company name must be unique and not offensive, restricted or prohibited names must also be put into consideration such as names having “bank,” “insurance,” “trust,” “chartered,” “assurance,” “mutual fund,” “company management,” or “Chamber of Commerce”. So, before starting your incorporation process, make sure to check that your name selections are both available and usable.
- Shareholders/Directors/Officers: for the purpose of registration, the company needs to provide at least one shareholder (individual or corporate entity) and at least one director. The same person can serve in both capacities. Resident directors and secretaries are not required for incorporation.
- Taxes: Profits and distributions to shareholders along with exchanging shares are not taxable either to the corporation or the shareholder. There is no withholding of taxes, no estate, gift, or inheritance taxes levied on corporate share transfers.
- Privacy: Public access to records in the Register of Directors and Officers or the Register of Shareholders is prohibited, such that shareholder and director names remain private in the Cayman Islands.
- Annual Generating Meeting: An annual general meeting is required for corporations operating in the Cayman Islands. However, meetings do not need to be held locally, and companies may hold their meetings anywhere in the world.
- Authorized Capital: Registration in the Cayman Islands requires no minimum authorized capital shares.
CAYMAN ISLANDS COMPANY REGISTRATION PROCESS
Company incorporation is usually straightforward and processed online, however for exempted companies or foreign companies, it is more convenient to get professional firms providing such services to assist with the registration to avoid any form of issues during registration. The process of incorporation may differ based on the type of company to be registered. There are three key steps to incorporation;
- Reserving your company name: The first step for the applicant is to reserve its company names which must be unique and not offensive, restricted or prohibited. Reservation may last from 7 days to 120 days depending on the applicant’s preference and how much is paid.
- Registration Process: Upon approval of the reserved name, the applicant is to prepare the required incorporation documents. Information such as Director, Shareholder, share capital, share ratio, valid means of ID.
- Submit documents: Having completely filled and collated the incorporation documents, applicant will submit the forms to the Registry for approval. Approval of the registration can take within one to four working days.
The following documents are important documents during registration:
- Memorandum of Association:
This contains the name, registered office, objectives of the company, the type (resident, non-resident, or exempted), the authorized capital and type of shares, names, addresses and signature of the subscribers and the number of shares taken by subscriber, name and signature of witness and the date of execution.
- Articles of Association
This regulates the internal operations of the company, such as how meetings are called, powers of directors, and officers.
- Cayman Islands Monetary Authority (CIMA) Approval
CIMA approval is required where companies are formed to enter into regulated business (e.g. banking, insurance, etc.). Where the name of the proposed company contains the words “bank” or “insurance” or their derivatives, CIMA approval is required for registration.
Upon approval the following documents will be issued:
- Certificate of Incorporation,
- Memorandum and Articles of Association,
- Appointment of the First Director,
- Registered Office service to December following incorporation,
- Registered Agent service to December following incorporation,
- First year Government fees,
- Share certificates,
- Register of shareholder/officers of the company.
Additional documents maybe be issued depending on the type of business registered.
Cost of Incorporation in Cayman Islands
The cost of registration of companies in Cayman Islands differs depending on the type of structure. A schedule of fees can be found on the Registry’s website. All fees quoted are in Cayman Islands Dollars (CI$). The conversion rate to be used for payment in United States Dollars (US$) is 0.82 (US$1.00 = CI$ 0.82).
Striking-off of Company Name
In accordance with the companies’ regulation, the Registrar General having reasonable cause to believe that a registered company is no longer carrying on business or not in compliance with the law may strike out the name of such company from its Register.
REGISTERED AGENT CAYMAN ISLANDS
Sidebrief provides registered agenct service for your incorporation need. We assist African businesses and Startups with forming a trusted, secure and confidential offshore company. We are able to assist your business.
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