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Benefits of The Cayman Islands
The Cayman Islands consist of a group of
three islands in the Caribbean. The main island, Grand Cayman,
is situated approximately one thousand one hundred and fifty
kilometres east of Miami or four hundred and seventy five
kilometres south of Miami and two hundred kilometres Northwest
of Jamaica.
The Cayman Islands have a tropical climate
and their population is approximately 30,000, the majority of
whom reside on the Grand Cayman.
The Cayman Islands are a British colony
and therefore the United Kingdom Parliament at Westminster
retains the right to legislate.
The economy of the islands is strong,
enjoying full employment with most of the revenue being derived
from the financial services sector and tourism. The official and
spoken language is English and their currency is the Caymanian
Dollar.
The Company Law of the Cayman Islands is
based on the English Companies Act of 1948 and can be found in
the Cayman Islands, Companies Law of 1960, as amended. The type
of company for International Trade and Investment is the Exempt
Company.
Other
Benefits of the
Cayman
Islands
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Companies can be incorporated within 24
hours. |
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There are no taxes or exchange controls
and funds may be moved freely into and out of the Cayman
Islands. |
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No minimum authorised share capital. |
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Bearer shares can be issued. |
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The register of members can be kept
anywhere in the world. |
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Confidentiality in relation to beneficial
ownership is strictly safeguarded in the Cayman Islands. |
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No requirement for accounts to be audited
or filed. |
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No public access to information regarding
directors, officers and shareholders. |
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There are excellent telephone, fax and
telex facilities with direct dialling to and from the rest
of the world. |
Questions
&
Answers
regarding
Companies in the
Cayman
Islands
A. The Structure
of a Company.
1. Types of Corporations.
The Companies Law of the Cayman Islands
allows incorporation of a variety of incorporations and has the
flexibility required to meet the needs of the most demanding
customers. At present the following types of corporations are
available:
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The Exempted Company.
This company does business from and within the islands, can
issue par value shares, no par value shares, bearer shares,
registered shares, is not required to use the word
“limited”, obtains a guarantee from the Governor which
ensures that in the unlikely event that tax is ever
introduced it will be exempted from such taxation for 20
years from the date of incorporation, files a limited return
and can be incorporated within one day. |
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The Non-Resident
Company. This corporation is very similar to the
exempted company with the exception that it cannot eliminate
the word “limited” or issue bearer shares and it must file a
more comprehensive return. |
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Limited Duration
Company (LDC). This company is a recent addition to the
corporate structure available to persons using the Cayman
Islands and allows establishment of an entity which must be
dissolved within 30 years of incorporation. Its special
features allow it to be treated for United States tax
purposes as a partnership, which is important in certain
areas of tax planning. |
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Limited Life Company
(LLC). This company may be incorporated for a specified
period of time or created to dissolve on the happening of
certain events. |
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The Ordinary Resident
Company |
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The Ordinary
Non-Resident Company |
2. What is the procedure to Incorporate?
For exempt Companies by submission of the
Memorandum and Articles of Association and registration fee to
the Registrar of Companies, together with a sworn statement
declaring that the business activities of the proposed company
will be undertaken mainly outside the Cayman Islands. The names
and addresses of the proposed first directors must be disclosed
to the Registrar.
3. Authorised and Issued Share Capital.
The minimum is US $1,00, but it is normal
to incorporate with an authorised share capital of US $50,000
divided into 50,000 common voting shares of US $50,000, this
being the maximum for the minimum Capital Duty payable to the
Registrar of companies upon incorporation. The minimum issued
share capital is one share of no par value or one share of par
value.
Registered as well as bearer shares are
permitted. A minimum of two shares should be issued in the case
of LDCs. The register of members is not open for inspection and
may be maintained outside the Cayman Islands.
4. Which classes of Shares are permitted?
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Registered
Shares of par or no par value. |
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Bearer Shares. |
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Preference
Shares. |
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Redeemable
Shares. |
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Voting or
non-voting shares. |
B.
Provisions in the Act relating to the Management and
Administration of the Company.
1. Directors.
The minimum number of directors is one.
The directors may be natural persons or bodies corporate. The
directors may be of any nationality, and need not be resident in
the Cayman Islands. A Director may also be the secretary.
2. Shareholders.
The minimum number of shareholders is one.
3. Company Secretary.
The Cayman Islands Companies Ordinance
does not make any specific reference to a requirement for a
Company Secretary. However, it is customary to appoint one, who
may be either a natural person or body corporate.
4. Financial Statements Requirements.
There is no requirement to file accounts
for Exempt Companies.
5. Taxation.
The Cayman Islands are a tax neutral
financial center. There are no income, capital gains, estate,
profit or other forms of direct taxation imposed on persons
living in the Cayman Islands or entities doing business in and
from the Cayman Islands. Indirect taxation is imported into the
country. Guarantees are given to various entities which conduct
business in and from the Cayman Islands that they will remain
free of taxation in the unlikely event that such would ever be
introduced.
C. Annual
Reporting Requirements
1. Annual return.
In January of each year every exempted
company (including LDCs and LLCs) must file a return with the
Registrar declaring that:
1.1 the memorandum of
association has not been amended;
1.2 operations of the
company have been mainly outside the Cayman Islands;
1.3 the company did not
engage in any activity within the Cayman Islands; and
1.4 an annual meeting of the board of
directors was held within the Cayman Islands.
2. The board of directors of every
company shall hold at least one meeting in the Cayman Islands in
each calendar year (see 1.4 above). Foreign directors may
appoint proxies in the Cayman Islands to attend any such meeting
on their behalf. The proxy need not be a director.
3. Every company shall, in January of
each year after the year of its registration, pay to the
revenues of the Cayman Islands an annual fee.
4. Any change in the directors of the
company must be notified to the Registry. The Register of
Directors is not open for public inspection.
Notes
(1) For a copy of a full set of documents
to be made apostille in the jurisdiction will cost a minimum US
$
We are not responsible for any forthcoming
changes concerning the rules and regulations of the
jurisdiction.
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