The Cayman Islands can be easily treated as suitable offshore jurisdiction that ensures ease of business entity formation, diversity of their types and plenty of incentives for business. Prifinance specialists have prepared for you a short overview of why it may be beneficial to consider this jurisdiction as your target one.
Forms of Legal Entities
If you think about opening a legal entity in the Cayman Islands, it is possible to do this in the next forms:
- Limited Liability Company (LLC) – this form is the most appropriate for conducting business activities outside the territory of islands. In the case with LLC, the founders (members) are not liable for the entity’s debts and obligations and their liability is restricted to the value of contributions only. There is no minimum threshold for the share capital of this type of entity.
- Exempted Company – more simplified rules for vehicle maintenance are applied here. For instance, it is not obliged to keep and make open for public inspection its register of members. It is also not obliged to hold the annual general meeting in the territory of islands; it may change its Memorandum and Articles of Association without restrictions, etc. This type of entity enables to reduce costs for its operation and the sums of taxes due.
- Ordinary Resident Company – this entity is entitled to run business within Islands. It is open for public inspections and has to maintain the register of its members.
- Ordinary Non-Resident Company – the entity can obtain this status if it is not going to conduct business in the islands but intends to perform this activity somewhere outside. Still, it should keep the register of members and be open to public inspections.
- Overseas (Foreign) Company – an entity that is incorporated somewhere outside the islands, but can conduct business and possess land plots in the islands subject to certain conditions.
- Special Economic Zone Company – as its title implies, an entity can enjoy certain incentives within special economic zones. Re-registering already existing exempted companies as special economic zone entities may appear as a good solution if you want to enjoy certain incentives.
- Unlimited Company – the founders (members) of this vehicle bear unlimited liability over the entity’s debts and obligations.
- Limited Partnership – may be formed by two or more persons to conduct business under one name. The partnership may have (i) general partners (at least one) who bear liability for all partnership’s debts and obligations, and (ii) limited partners whose liability is restricted to the sums of their contributions only.
- Exempted Limited Partnership – this partnership is suitable for offshore foreign investors who can conduct business outside the territory of islands only. They can do business in the islands only to the extent this is required to operate abroad. This type of partnership reserves basic features of a limited partnership but ensures more flexibility for doing business. The existing limited partnership may obtain the exempted limited partnership status or it may be newly-founded.
Registration Requirements and Steps
As any other similar approach, Cayman Islands business registration has its specifics. Prifinance specialists may consult you and assist with completing this process successfully. Setting up LLC in the Cayman Islands generally covers these basic steps to pass:
- Defining your business objectives and composing a business plan.
- Choosing and reserving the business name of a future company and selecting its registered address.
- Collecting information about beneficiary owners of the future company.
- Preparing the set of documents:
- Registration forms;
- Memorandum and Articles of Association;
- Sworn affidavit that the future company will conduct commercial activities outside the territory of islands only.
- Cayman Islands Monetary Authority (CIMA) approval (optionally, required for certain types of activities only (like insurance, banking).
- Submitting the set of documents for the registration of a vehicle to the Registrar of Companies.
- Registration of the newly-founded entity for tax purposes.
- Opening a bank account.
The procedure of registration and further operation of entities in the Cayman Islands is generally governed by Companies Law, Limited Liability Companies Law, Partnership Law, and other related bylaws. This jurisdiction cares about ensuring the legal framework that boosts doing business by foreign investors who operate outside it.
The main body that carries out registration activities is the Registrar of Companies. For certain activities, the involvement of CIMA may also be required.
Advantages of Forming a Company in the Cayman Islands
If you have decided or consider starting a company in the Cayman Islands, you may enjoy these benefits in the outcome:
- Confidentiality – the jurisdiction ensures a very high level of security. Only the title of a company, its date of registration, type, address, and status can be publicly available. The company is still obliged to keep information about its beneficiaries that may be disclosed in a certain limited number of cases, specifically for combating illegal activities.
- Existing of Cayman Enterprise City with plenty of benefits.
- Easy and straightforward incorporation procedure, moderate costs for establishing a company here.
- Non-burdensome operating, reporting and accounting requirements.
- Various incentives for doing business, including tax.
Here are major highlights of the local tax system:
- Corporate income tax – not applicable (N/A)
- Personal income tax – N/A
- VAT – N/A
- Withholding tax – N/A
- Capital gains tax – N/A
How Prifinance Specialists May Help You
If you consider setting up a company in the Cayman Islands and have doubts about that, Prifinance specialists may assist you in making the final choice. Our professionals facilitate the practical realization of business-related objectives of our clients abroad.
We will pick for you the right approach for establishing a company in the Cayman Islands or elsewhere: choose its structure, the most beneficial tax regime, and other significant parameters for starting or expanding your business. Preparation of all required registration documents, opening a bank account, conduction negotiations for resolving any other business-related matters are covered by our offer also. Reach us shortly for more precise discussions.