Cayman Islands

The Cayman Islands is the most promising business avenue for businesses worldwide. It is an ideal destination for those who want to reap tax-free income from their venture and keep thriving solidly.

So, what is stopping you from setting up a business here? Perhaps it may be legalities! Before you embark on a business quest, being aware of regulatory affairs is vitally important. Let’s drill down the legal requirements around Company registration in the Cayman Islands.

What makes the Cayman Islands an ideal Business hub?

The Cayman Islands foster a business-friendly environment and offer the versatility and flexibility every entrepreneur wants. Here are some reasons that support this statement.

Seamless and Swift Incorporation

Companies law is more liberal in terms of how the legalization of a business entity proceeds. There is little to no scope of Red Tapism, which implies that paperwork for registering an entity is minimal, ensuring prompt processing.

Considerable tax exemption

The tax structure in the Cayland Islands favors businesses and allows for minimal deductions, ensuring more revenue and profit. What’s more- the applicability of direct taxation does not exist here, making this destination even more enticing from a business standpoint.

Repatriation of profit with zero taxes

In most nations, the repatriation of profit attracts stringent inspection and taxes. But that is not the case with this part of the world since it fosters a liberal environment that safeguards business investment.

Robust Legal Environment

The Cayland Islands has a robust legal environment controlled by a democratically-elected local government. This means businesses have more control over pitfalls like default payments, client disputes, intricate statutory affairs, etc.

World-class infrastructure

The Cayland Islands sits on the globally recognized infrastructure comprising top-tier lending companies, trust entities, law firms, IT service providers, etc.

Business Models for Company Registration in the Cayman Islands

The following business models are available to applicants for Company Registration in the Cayman Islands:

Limited Liability Company

Limited Liability Company is a popular form of business model. It is stable, less risky, and transparent. It brings a separate legal identity to the business and safeguards members’ personal assets.  The liability scenario in this model is limited as members are only required to address losses to the extent of their contribution.

Foundation Company

A foundation company is a non-profit institution primarily serving philanthropic purposes, such as providing financial aid, rendering education, facilitating funds for medical care, etc.

Resident Company

An ordinary resident entity undertakes business affairs within the Cayman Islands.  These companies are obligated to maintain records concerning existing and erstwhile members. The authority can inspect these documents anytime, along with other details like paid-up capital. Such companies can own land under their name.

Non-Resident Company

A non-resident company has a non-resident status issued by the Registrar of Companies, helmed by the Ministry of Finance. The status confirms that the company has no intention of performing business affairs within the Cayman Islands. However, they can perform undertakings that keep their foreign business running. They can deal with shares of exempted entities, delve into a partnership, and be involved with overseas entities.

Exempted Company

Exempted company is a business model that mostly suits entities willing to operate offshore. There are two types of exempted companies available in the status quo.

Exempted Limited Duration Company

Exempted Limited Duration Company can last as long as 30 years, and it must have two members, at least. The MoA of such a company must entail the event that brings its existence to an end and the timeline for which it will work.

Segregated Portfolio Company

An SPC draws a line of distinction between a company’s assets and individual assets. The same is true for liabilities held by these entities. Despite this segregation, the notion of a separate legal entity doesn’t exist here.

Overseas Company

An overseas company operates in a location other than the Cayman Islands. These entities must hold legal approval as per Part IX of the Companies Law for owning land or performing business affairs or to serve as partners to the Exempted Limited Partnership.

Special Economic Zone Company

SEZ entities are bound to operate within the dedicated economic zone. The existing exempt companies can opt for re-registration and function as SEZs as per the Companies Law (PART VIIIA). The charter document of such entities must reflect their objective behind being a SEZ company. The name of an entity must include the initials- SEZC.

Unlimited Company

As the name suggests, such entities pose unlimited liabilities to the shareholders or members. That means they must contribute beyond their holding to compensate for the company’s losses, debts, and other fiscal obligations during winding up. While applying for registration, include the number of members and the share capital threshold in the charter documents since it is a mandatory requirement.

Associations not For Profits

It seeks approval from the governor of Cayman Island and is formed to serve charitable purposes concerning religion, science, education, and charity. Since these entities serve philanthropic objectives, they cannot use profit for personal agendas.

Notable Requirements Concerning Company Registration in the Cayman Islands

When legalizing a business entity in the Cayman Islands, you must know the legal distinction between local businesses and exempted entities outside the jurisdiction.

A Trade & Business Licence usually works just fine to run a local business. But when it comes to overseas control or ownership, the regulations under The Local Companies Law (LCCL) come into play with an exception given below.

The Local Companies Law is not only applicable when the majority of the company’s shareholding belongs to a foreign owner and its management entails no local directors.

Likewise, if 60% of the shareholding belongs to the Caymanians and directorial positions in the company are held by 60% of local residents, the Local Companies Law comes into effect. In such a case, you must apply for an LCCL license.

Based on the business type, you must share various approval and license applications with relevant boards, each helming individual sector.

Entities seeking to function locally without local shareholding must share their ads concerning Caymanian partaking with the DCI, which stands for Department of Commerce and Investment. The institution is the secretariat to the TBLB, i.e., the Trade and Business Licensing Board, for the promulgating on the DCI portal.

This helps amplify the prevailing requirement to promote funding opportunities in a local newspaper, and both are mandatory, following which the TBLB shall process the application for LCCL.

The Board has made both steps mandatory in the purview of Section 11 of the Local Companies (Control) Act (2019), which requires the client to substantiate that efforts have been made to secure Caymanian participation.

Conditions for Company Registration in the Cayman Islands

Those seeking company registration in the Cayman Islands must fulfill the following prerequisites:

• Minimum 1 Shareholder
• No Minimum Paid capital
• Minimum 1 Director
• Yearly Annual returns
• Yearly Annual General Meeting

Paperwork for Company Registration in the Cayman Islands

The following documents shall serve as an annexure to the application for Company Registration in the Cayman Islands.

• Articles of Association
• Memorandum of Association
• Approval from the Cayman Islands Monetary Authority
• Evidence concerning financial statements

Guide to Secure Company Registration in the Cayman Islands

Company incorporation is a delicate process involving various steps, from structure selection to opening a bank account. Let’s discover what this process is all about.

Step 1: Business Structure Selection

Every business structure has its pros and cons. Choose a legal structure that fits your vision, management capabilities, and business footprint. Take time to drill down your options and avoid making impulsive or unplanned decisions, as it can lead to a chaotic situation in the future.

Step 2: Name Reservation

Choose a unique company name and approve it via the Companies Registry. Stay away from names with trademarks. Also, avoid considering names that are likely to create conflict in terms of public sentiments or religions.

Step 3: File Application

Once you have secured a company name, it’s time to file an application for company registration with the General Registry of the Cayman Islands. To do so, you must fill out a prescribed application with legit details and attach the same with relevant paperwork. All dossiers must be accurate and free from any misleading information.

Step 4: Opening a bank account

Upon securing the company registration, visit a designated bank to open a bank account. The bank account will help you legalize business-related transactions. Common documents required for opening a bank account include an incorporation certificate, MOA, registers of members and directors, ID of the authorized signatories, etc.

Let Adviso be Your Licensing Partner: Get onboard Today!

Today, Adviso stands as a prominent licensing firm in India, having a robust network of seasoned professionals committed to excellence. We offer a range of services that ease settling an entity abroad. Whether you want to partner with an exempted company or intend to establish a brand-new entity, our expertise is second to none.

Why Us?

• Quick onboarding of requests
• In-depth drill down of legal requirements
• Unprecedented acumen in licensing-related affairs and compliances
• Granular understanding of business models and their potential
• A robust network of seasoned professionals with unmatched expertise in incorporation legalities