The Cayman Islands is a British Overseas Territory that comprises of three islands: Grand Cayman, Little Cayman and Cayman Brac.
George Town is the capital and the largest city.
The legal system is based on the British common law and English is the official language.
Economy and infrastructure
The territory is considered to be a classical tax haven. Income tax, capital gain tax, property tax and several other taxes are not present.
The Cayman Islands is one of the major offshore financial centres in the Western Hemisphere. It is the domicile of more than 500 banks and trust companies. The assets of the latter exceed half a trillion US dollars. The Caymans is the favourite jurisdiction for hedge funds. More than 10,000 of these entities have been present there. The overall number of the offshore entities goes beyond forty thousand.
There are no foreign exchange regulations.
The main Cayman Islands statute affecting offshore business is Company (Amendment) Law 2009.
Confidential Relationship Preservation Law 1995 criminalizes premeditated disclosure of sensitive information to the third party, as well as attempted access to such information and allows for KYD 5,000 fine and/or two-year jail sentence.
The most popular type of entity for the international trade and investments is the Cayman Islands Exempt Company, which is very similar to the Turks and Caicos Exempt Company as these two jurisdictions share the same company legislation. The Caymanian Exempt Company has all the rights and privileges of a private person.
• The Caymanian Exempt Company shall not do business within the Caymans, nor own a property there
• It shall not be engaged in banking, insurance and mutual fund activity
• It shall not issue bonds or assume a debt commitment in some other way
The registration procedure includes the filing of the company statutory documentation with the Registrar of Companies and paying up all government fees. The first directors’ personal data needs to be filed. The Cayman Exempt Company must have a registered office and a local registered agent within the jurisdiction.
Restrictions on Company name
• The use of Latin characters in the company name is mandatory. The English version of the company name is also a must
• The words to be excluded from the company name: bank, insurance, reinsurance, trust, municipal, charter, cooperative, fund management, asset management, trust management
• The words that imply royal or government patronage, privileges cannot be used
• The limited liability status of the Company is to be denoted by the use of the words “Limited”, “Incorporated” or their abbreviated forms.
The law states that any Cayman Exempt Company shall be managed by at least one director either individual or corporate of any nationality or residency. The director’s information is closed to the general public. The Company must hold annual meetings. They can be arranged by proxies. A company secretary either individual or corporate must be appointed.
At least one shareholder is needed. The shareholder’s data is not accessible to the general public.
Authorized share capital
The minimal authorized capital of the Cayman Exempt Company is $1. Normally, the authorized share capital is $50,000 divided by 50,000 ordinary voting shares, on $1 per share. At least one share with par or no-par value shall be issued.
The Company is allowed to issue:
• Registered shares
• Bearer shares
• Par value shares
• No-par value shares
• Preference shares
• Redeemable shares
• Voting shares
• Non-voting shares
Taxes and duties
Individuals, companies and trusts are not taxed. There is no income tax, capital gain tax, deductions from profit, dividend tax, investment tax and funds transfer tax. The government guarantees exempt tax regime for the first twenty-year period that can be prolonged upon submitting a special application.
The annual renewable state duty is contingent on the size of the Company authorized capital:
• If the capital is less than $50,000, the state duty is $575
• If the capital is above $50,000 but less than $1,000,000, the state duty is $805
• If the capital is above $1,000,000 but less than 2,000,000, the state duty is $1,690
• If the capital is above $2,000,000, the state duty is $2,400
The annual financial record is required to be filed with the Registrar of Companies.