Cayman Islands

Basic information 

The Cayman Islands, as an overseas territory of Great Britain, consists of three islands located in the western part of the Caribbean. 

Key features of the corporate environment in the Cayman Islands

• An important international financial center 
• World headquarters of many offshore hedge funds 
• Second largest captive insurance center 
• Absence of direct taxes on the income of natural and legal persons and real estate 
• Friendly approach to business 
• Flexibility within English common law 
• The public and private sectors maintain cooperation between them resulting in a flexible response to the needs of the local and international market 

The Cayman Islands are known for their strict adherence to international regulatory standards and anti-money laundering procedures. Thanks to this approach, it ranks among the leading international financial centers in the world. 

The Cayman Islands and its tax regimes

There is a minimum tax in the order of units of percent for Cayman Islands companies. However, the Cayman Islands also have their own regimes for different types of companies, such as financial institutions in the form of funds. 

Cayman Islands and accounting

The government does not require accounting. However, even so, every company is required to keep its accounting records. This is an overview of income/expenses and assets/liabilities. The accounting records do not have to be kept physically directly in the Cayman Islands, however the governing bodies of the company must ensure that they are produced without delay if requested by the relevant authorities.

International treaties

Incorporation of a company in the Cayman Islands

• The company requires at least one natural person who will be in the position of director and owner. 
• Another legal entity can also hold a position in the company structure.
• For incorporation of a company, we require at least two name proposals. The name must be in English and must end with the word, phrase or abbreviation of the word “Limited.” 
  • The name of the company is published in the publicly accessible register of incorporated companies. 

What is included in the price of incorporation: 

1. company formation, 
2. payment of the Government Registration fee (state fee for incorporation of  a company), 
3. company registered office for 1 year, 
4. registration agent for 1 year, 
5. issuance of corporate documents. 

The company is incorporated within one week of the delivery of all necessary documents and information for incorporation. 

Every following first month of the year, the company must file a declaration with its registration agent about the changes in business. Renewal fees must be paid by December 31 for the following year. 

Annual completion of the Economic Substance form

Companies operating in the following areas of business are required to fill out the Economic Substance form:

• fund management, 
• banking, finance and leasing, 
• ship transportation, 
• holding companies, 
• distribution, 
• intellectual property. 

Companies that only have equity participation in other legal entities and whose income is dividends and capital gains (so-called Pure Equity) are subject to this obligation to a limited extent.

Companies must register with the local tax authority (Tax Information Authority) when they are incorporated. To complete the form, the company must, among other things, demonstrate: 

• the main activity of the company generates income directly on the island, 
• are controlled and administered directly in the Cayman Islands, 
• have a head office in the Cayman Islands, 
• have sufficient staff in the Cayman Islands. 

Companies that are exempt from this obligation:

• investment funds, 
• companies with tax residency outside the Cayman Islands,
• companies that are authorized to do business on the island without the status of an offshore company, 
• Cayman limited partnerships and tax-exempt trusts.