Company in The Cayman Islands
The Cayman Islands is one of the so-called tax havens situated in an autonomous British Overseas Territory in the Wester Caribbean Sea. The Cayman Islands is not a member of the European Union, hence that, European law does not distinguish Grand Cayman, Little Cayman and Cayman Brac.
Most of the money invested in the Cayman Islands comes from the Americas, where the Cayman legal system, activities of its courts and banks are highly valued; not to mention the total absence of income tax in the Cayman Islands. The Cayman legal regime is based on the British customary law system which is extended by local regulations.
The Cayman Islands value the senses of business security and reputation, which is the reason why the legal system is regularly revised and modified. The Cayman Islands is the fifth largest banking centre in the world and is considered as an offshore financial centre.
Company formation in the Cayman Islands and the choice of legal form
Company formation in the Cayman Islands is associated with the choice of its legal form. Three types of companies can be distinguished in the Islands: ordinary company, ordinary non-resident company and exempted company. For foreign investors, the most attractive way to open company in the Cayman Islands is the exempted company because of attainable tax benefits.
Company registration in the Cayman Islands in the form of Exempted Company
Company registration in the Cayman Islands in the form of an exempted company offers a wide range of benefits. The principle of this legal form of a company is a lack of taxation if the company does not operate in the Cayman Islands. Every company registered in the Cayman Islands must possess a registered address in the Cayman Islands. The Exempted company is the most frequently chosen form of to open business in the Cayman Islands by foreign investors.
Share capital and company formation
Generally, the company’s opening capital is seat at USD 50,000,00 which is divided into 50,000 shares with a value of USD 1.00 each. Shares can be issued with no face value. Bearer shares may be issued but they must be held by a curator, authorized or recognized by the monetary authorities or a trustee.
Taxes in the Cayman Islands
Despite the lack of taxes, the exempted company in the Cayman Islands is encompassed with regulations protecting it from taxation in the event of changes in legal system. The company receives a Tax Exemption Certificate (TEC). The holder of the certificate is exempted from taxes and is guaranteed a 20-year tax exemption period.
Directors and shareholders
Company in the Cayman Islands must have at least one director with the right to represent the entity in its internal structure. The director may be a natural or legal person. The shareholder of a company can also be both a natural and a legal person. Establishment of shareholders and trusteeship is very common. The same person may simultaneously act as a shareholder, secretary and director.
Anonymity and liability of partners
Company formation in the Cayman Islands involves the possibility of maintaining anonymity for shareholders. Exempt company registration in the Cayman Islands enables partners not to disclose their data in the local company register. Moreover, legislation including the Confidential Relationship (Preservation) Law guarantees the anonymity of the company’s owner. Practically the only information available in public registers is the name and address of the company’s registered office. The liability of the owners of an exempt company is limited to the size of the shares.
Company formation and its name
The name of a company opened in the Cayman Islands cannot include expressions such as: assurance, bank, trust, insurance, chartered, company management, mutual fund, chamber of commerce. The suffixes specifying the legal form of the company are: Limited, Ltd., Corporation, Corp., Incorporated, Inc.
Acconuting of a company
There is no legal obligation to keep the company’s accounts in the Cayman Islands, to conduct annual shareholders’ meetings, and to prepare company’s financial statements. The only official requirement is the submission of annual report in January to confirm operations done outside the Cayman Islands.
Ready made company in the Cayman Islands
Clients are considering buying a ready made and already registered companies in the Cayman Islands. Usually, a ready-made company in the Cayman Islands which was created for its subsequent sale exists for a short time and has not conducted any activity before the sale. Due to the legal regime, buying a company in the Cayman Islands is unprofitable and not widely practiced.