Cayman Islands Tax Exempted Company
General Information
A Cayman company can be formed in 24 hours.We have a wide experience of international finance involving Cayman SPV’s used as holding companies for asset protection, real estate, shares, general assets or IP rights, structured finance, project finance and investment fund formation.
Introduction
The Cayman Islands consists of a group of three islands in the Caribbean: Little Cayman, Cayman Brac and Grand Cayman. The main Island, Grand Cayman, is situated approximately 480 miles southeast of Miami.
Population
The population is approximately 55,000.
Political Structure
The Cayman Islands are a British colony and therefore the United Kingdom Parliament at Westminster retains the right to legislate. A “Governor” who is appointed by Queen Elizabeth II heads the Cayman Islands Government.
There is a Legislative Assembly consisting of 18 seats; 3 appointed members from the Executive Council (Financial Secretary, the Attorney General, and Administrative Secretary) and 15 members elected by popular vote. An Executive Council, consisting of three official members appointed by the Governor and four members elected by the Legislative Assembly, formulates policy and advises the Governor. Appointments are to a four-year term.
Infrastructure and Economy
The economy of the Islands is strong, enjoying full employment with most of the revenue being derived from the financial services sector and tourism.
Miami is one hour away by air and the Island has direct air links with New York, Atlanta, Tampa, Houston and Jamaica. The Islands are a popular cruise-ship stop.
Language
The official and spoken language is English.
Type of Law
Common Law based on English Common Law.
Currency
Caymanian Dollar.
Exchange Control
None.
Principal Legislation
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 1961
Companies (Amendment) (No 2) Law 2009 Companies Law (2007 Revision) , Companies (Amendment) (No 2) Law 2009 Companies (Amendment) Law 2010 Companies (Amendment) Law 2011
Company Information
Powers of Company
A Cayman Islands Exempt company has all the powers of a natural person.
Name Restrictions
Bank, insurance, assurance, reinsurance, trust, municipal, charter, co-operative, their foreign language equivalents or any name that, in the opinion of the Registrar, would suggest a connection with a Royal family or Government authority.
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.
Registered Office Required
Yes, must be maintained in the Cayman Islands.
Time to Incorporate
Two days.
Disclosure of Beneficial Ownership to Authorities
No requirement.
Restrictions on Trading
Cannot trade within the Cayman Islands; own real estate in the Cayman Islands. or undertake the business of banking, insurance business, or mutual fund business unless licensed. Cannot solicit funds from the public.
Language of Name
Names can be expressed in any language using the Latin alphabet, Chinese or Arabic, if the Registrar of Company receives a translation thereof. The corporate documents will however be in English.
Suffixes to Denote Limited Liability
There is no requirement to utilise a suffix to denote limited liability, although normally companies are incorporated to include the suffixes Limited, Incorporated, Corporation or their abbreviations.
Language of Legislation and Corporate Documents
English.An Arabic language facility was enabled in 2007.
Names Requiring Consent or License
Bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, asset management, trust, trustees or their foreign language equivalent.
Compliance
Authorised and Issued Share Capital
The minimum is US$1, but it is normal to incorporate with an authorised share capital of US$50,000; divided in to 50,000 common voting shares of US$1, this being the maximum for the minimum capital duty payable to the Registrar of Companies.
The minimum issued share capital is one share of no par value or one share of par value.
Licence Fees
For exempt companies:
with a share capital not exceeding US$50,000 – US$854
with a share capital greater than US$50,000 but not exceeding US$ 1 million – US$1220
with a share capital greater than US$1,000,000 but not exceeding US $ 2 million – US$2420
Financial Statements Required
Companies (Amendment) Law 2010 states that “Every company shall cause to be kept proper books of account including where applicable, material underlying documentation including contracts and invoices. Such documentation must be retained for a minimum period of five years from the date on which they are prepared”. Failure to retain such records shall be subject to a penalty of $5,000.
Unregulated exempt companies do not need to file accounts.
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.
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 a body corporate.
Classes of Shares Permitted
Registered shares of par or no par value, preference shares, redeemable shares and voting or non-voting shares.Bearer shares may be issued but must be held by an authorised depository.
Taxation
There is no form of taxation in the Cayman Islands relating to individuals, corporations or trusts.
Double Taxation Agreements
Not having any taxes other than customs duties and stamp duty, the Cayman Islands did not, until recently, enter into any Double Tax treaties with other countries. It has, however, entered into limited tax treaties with the UK and New Zealand, and signed a comprehensive tax treaty with Japan in 2010 (see below) in addition to several tax information exchange agreements, which have ensured that the jurisdiction no longer features on the OECD’s ‘grey list’ of territories which have not substantially implemented the internationally agreed tax transparency standard.
Cayman entered into a mutual legal assistance treaty with the USA, although the treaty specifically excludes fiscal matters. In November, 2002 the Cayman Islands also signed a Tax Information Exchange Agreement with the US (see below).
In March 2009, the Cayman Islands successfully concluded technical negotiations on a series of bilateral agreements with seven Nordic states, including tax information agreements, and went on to sign additional information agreements with G7 and OECD member countries in 2009 and 2010.
After the Cayman Islands was forced to accept ‘information sharing’ under the EU’s Savings Tax Directive in 2004, the UK agreed to move discussion of a tax treaty between the United Kingdom and the Cayman Islands to the head of the queue. “The UK has moved the Cayman Islands to the front of the queue of countries and territories wishing to have treaty talks,” the UK’s Paymaster General, Dawn Primarolo told government leader McKeeva Bush in a letter dated May 20. In July, 2005, the UK government reiterated that it was giving a high priority to the question of a Cayman tax treaty.
Shareholders
The minimum number of shareholders is one.
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