Cayman Islands company formation.

A centre for funds and international capital.

The Cayman Islands are among the most established international finance centres, with a company law that institutional investors and their advisers know well.

Companies are registered by the General Registry under the Companies Act. An exempted company is intended to conduct its business mainly outside the Islands, which is why it is the standard choice for investment funds, special purpose vehicles and international holding companies. It is generally a more sophisticated, and more costly, vehicle than a BVI or Seychelles company, and is chosen where institutional credibility matters most.

AT Express is headquartered in Cyprus, with offices in the United Kingdom, Hong Kong, China, Vietnam and Singapore. We coordinate Cayman formations with licensed corporate service providers and law firms in the Islands, and help clients judge whether a simpler offshore structure would achieve the same aim.

The exempted company.

An exempted company may be limited by shares, by guarantee, or by both, and may have a single shareholder. Its activity within the Cayman Islands is restricted to what furthers its business abroad. Other forms include ordinary resident companies, limited liability companies, segregated portfolio companies for ring-fencing assets, and exempted limited partnerships, which are frequently used for private equity and venture funds.

What sets the Cayman Islands apart.

• A single shareholder and a single director are sufficient for a private exempted company.
• A registered office in the Islands, normally provided by a licensed service provider.
• Fund-friendly legislation and a regulator experienced in investment funds.
• A common-law legal system, with a specialist Financial Services Division of the Grand Court.
• No public register of members, and no requirement to hold an annual general meeting in the Islands.

A tax-neutral jurisdiction.

According to the Cayman Islands General Registry, companies registered in the Islands are not subject to income, capital gains or other direct taxes. The Islands are therefore described as tax neutral: tax is generally paid by investors and owners in their own countries rather than at the level of the company.

Companies that carry on relevant activities must also comply with the Cayman Islands economic substance regime, administered by the Department for International Tax Cooperation, and file an annual notification. Owners should take advice in their country of residence, where controlled foreign company and anti-avoidance rules may apply.

A balanced view.

What you will need.

• A registered office in the Cayman Islands, usually provided by a licensed corporate service provider.
• At least one shareholder and one director, individual or corporate.
• A memorandum and articles of association, and a declaration that the company will operate mainly outside the Islands.
• Full due diligence on directors, shareholders and beneficial owners, including identification, proof of address and the source of funds and wealth.
• A clear description of the intended activity, including any regulated business.

From first call to registration.

The timetable depends on the completeness of the due diligence documents and on any licensing involved. We set out a realistic timetable in writing before work begins.

Keeping the company in good standing.

• Annual return and fee. An exempted company files its annual return and pays its annual fee to the Registrar in January; returns not filed by the end of March attract penalties.
• Registers. Registers of members, directors and mortgages and charges must be maintained, and changes of directors notified to the Registrar.
• Beneficial ownership. Ownership information is maintained through the corporate service provider and kept up to date.
• Economic substance. An annual economic substance notification, and a return where relevant activities are conducted.
• Regulatory filings where the company carries on regulated business, such as fund activity.

Banking for a Cayman company.

Cayman companies commonly bank with international institutions in major financial centres, often through the relationships of their fund administrator or law firm. Approval rests entirely with the bank. A transparent ownership structure, a clear commercial purpose and complete documentation are essential. See international bank account opening and our guide to banking for an offshore company.

Frequently asked questions.

Official sources.

1. Cayman Islands General Registry, Exempted company — operations mainly outside the Islands, register of members and annual declaration.
2. Cayman Islands General Registry, What is the general taxation rate for incorporated companies?.
3. Department for International Tax Cooperation, Economic substance and international tax cooperation.
4. Council of the European Union, EU list of non-cooperative jurisdictions for tax purposes.
5. OECD, International standards on tax transparency, including the Common Reporting Standard.
6. Internal Revenue Service, Foreign Account Tax Compliance Act (FATCA).

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