The Cayman Islands were once part of the British Empire as a colony and then became a British Overseas Territory. English is the primary language in the Caymans. English common law has always been the standard for its judicial system. The Cayman Islands are well known as a tax haven because it has no income taxes and has an easy process for offshore incorporation. The Cayman Exempted Company has become a very popular choice for foreign businesspeople to hold offshore bank accounts because of the privacy and Cayman tax-free benefits.
Cayman Islands corporations operate under the Companies Law of 1961. Their corporate laws attract international business and numerous offshore investors choose to incorporate in their jurisdiction. Incorporating in the Cayman Islands is attractive to many because it is a very developed and stable economy, including support from trust companies, lawyers, banks, insurance managers, accountants, administrators, and mutual fund managers. Furthermore, companies can find local support services to aid them.
Benefits of a Cayman Islands Company
Why do companies incorporate in Cayman Islands? There are many reasons why foreign investors choose the Cayman Islands for incorporation. Some of the benefits which Cayman corporations receive include:
- Stability: The government has always been stable and the economy has remained strong due to its popular banking system, offshore corporations, and tourism.
- White Listed: Unlike many other so-called “tax havens”, the Cayman Islands follows international tax regulations, which has kept them from being under suspicion or black-listed by the international Financial Action Task Force, and by the international Organization for Economic Co-operation and Development (OECD).
- Fast Incorporation: The Incorporation process can only take one day. That’s because there is no requirement for government regulatory authority approval. In addition, their initial corporate registration and annual renewal fees are low when compared to other jurisdictions.
- Flexibility: Forming a Cayman Islands corporation provides options for flexibility. For instance, corporate directors and officers do not have to be legal residents.
- Privacy: Corporate documents related to conducting business such as the register of shareholders or meeting minutes do not have to be registered with the Cayman Islands government and can be stored anywhere in the world. In addition, there is no requirement to have an annual shareholder meeting or an annual audit. The public is not allowed to view The Register of Directors and Officers or the Register of Shareholders. Furthermore, company accounts remain private in this jurisdiction.
- No Upfront Capital: There is no requirement for depositing authorized capital in a bank or in escrow when incorporating in the Cayman Islands.
- No Shares Transfer Tax: When the corporation transfers shares to third parties there are no taxes or duty stamps, unless the shares are related to real estate investments.
- Mergers Allowed: Mergers with other corporations either in the Cayman Islands or in other countries are allowed. The final merger can result in that corporation to exist in any jurisdiction. Merging corporations often choose to remain in the Cayman Islands jurisdiction doe to the many benefits offered.
- Single Director: A Cayman Islands corporation is allowed to have only one director and one shareholder who could be the same person or entity. No other directors (including a resident director), shareholders, or officers are required.