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Cayman Islands Exempted Company

Cayman Island

Synopsis

Cayman Island Exempted Company SetupThe Cayman Islands are a British Overseas Territory situated in the Caribbean Sea approximately 500 miles south of Miami, Florida. The Islands enjoy sophisticated legal, accounting and banking services and derive political stability by virtue of their connection with Britain. The legal system is British and the government is headed by a Governor appointed by the Crown who presides over a government made up of twelve locally elected members and three senior civil servants who hold ex-officio office.

There is no exchange control and no restriction on the movement of funds to or from the Islands.

The Cayman Islands have no double taxation treaties with any other part of the world but have undertaken to assist foreign governments by giving them information where a Cayman Island company has been used or involved in activities which are mutually considered as criminal.

The Cayman Islands Exempted Company

A Cayman Island exempted company has the following characteristics:

Shareholders: Shares must be issued in registered form, although details of the shareholders are not maintained on public record. Bearer shares are only permitted when lodged with an authorised custodian within the Islands.

Directors: Details of the directors must be advised to the company registrar but this information is not available for public inspection. Directors do not have to be resident in the Cayman Islands. A minimum of one director is required and corporate directors are permitted.

Officers/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.

Restrictions on Name & Activity: Generally, although not strictly necessary, names would end with one of the following words, or abbreviations thereof - Limited, Corporation, Incorporated, Societe Anonyme or Sociedad Anonima.

The following words, and their associated activities, cannot be used without approval and/or licensing: Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Cooperative, Empire, Imperial, Insurance, Municipal and Royal.

Local Requirements:As a matter of local company law the company must maintain a registered office address within the Cayman Islands. We would generally provide this service and a local resident agent as part of our domiciliary services.

Every company must maintain 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.

Timescale: Incorporation time approx. 10 days and document legalisation can take another two weeks.

Reporting: There is no requirement to file accounts with the registrar. However, an annual return must be filed which is a simple declaration.

Taxation:There are no taxes in the Cayman Islands on income, capital gains, profits, dividends, investments or capital transfers. The company may apply for a twenty year guarantee against taxation from the Cayman Islands Government, which may be extended to thirty years on application.
Cayman cos are non-resident companies and hence not entitled to tax residency certificate and also can not avail benefits under any Double Tax Avoidance Agreements.

Confidentiality:The Confidential Relationships (Preservation) Law makes it a criminal offence to divulge confidential information or to willfully obtain or attempt to obtain confidential information relating to a Cayman Island company. The law imposes a maximum penalty of a fine of CI$5,000 and/or a term of imprisonment of up to 2 years. However as with most jurisdictions, this confidentiality is being eroded by subsequent legislation such as the Proceeds of Criminal Condut Law 2001 and mutual assistance treaties whereby there will be disclosure of information in criminal offences, including tax offences.

Company Renewal:Renewal of company, to be paid in December every year. This is a requirement by company registry. Failure to do so results in penalties and could result in the striking-off of the company from the company registry
Latest valid passport copy and recent utility bill for address proof of shareholder/director are required to be submitted at every renewal as a part of enhanced due diligence. If shareholder is a corporate entity, then latest certificate of incumbency and above stated docs of directors would be required.

Documents Required:
KYC Documents for individual Director/Shareholder

  • Passport copy
  • Proof of address (dated less than 3 months)
  • Bank reference (dated less than 3 months with satisfactory record clearly mentioned and also the time period the client has been dealing with the bank: minimum of 2 yrs)
  • Detailed CV
  • Professional reference

KYC for Corporate Director/Shareholder

  • Certificate of incorporation
  • Registered address and place of business
  • Certificate of current standing if incorporated more than 1 year
  • Register of Directors
  • Register of Shareholders
  • Financial statements
  • Memorandum & Articles of Association

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal, tax or other professional advice. We do not accept any responsibility, legal or otherwise, for any errors or omissions.