Cayman Islands

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> General Information
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Key Corporate Features

General Information

The Cayman Islands were colonized from Jamaica by the British during the 18th and 19th centuries, and were administered by Jamaica after 1863. In 1959, the islands became a territory within the Federation of the West Indies, but when the Federation dissolved in 1962, the Cayman Islands chose to remain a British dependency, therefore, the United Kingdom Parliament at Westminster retains the right to legislate.

The Islands have a Governor who is appointed by the Queen who heads the Cayman Islands Government and is responsible for the civil service, defence, law and order and external affairs. There is a Legislative Assembly consisting of 12 elected members plus the Financial Secretary, the Attorney General and the Administrative Secretary, which may make laws with the consent of the Crown. An Executive Council, consisting of three official members appointed by the Governor and five members elected by the Legislative Assembly, formulates policy and advises the Governor.

The Cayman Islands consists of a group of three islands in the Caribbean. The main island, Grand Cayman, is situated approximately 1150 kilometres south of Florida. The population is approximately 45,000.

With no direct taxation, the islands are a thriving offshore financial center. More than 68,000 companies were registered in the Cayman Islands as of 2003, including almost 500 banks, 800 insurers, and 5,000 mutual funds. A stock exchange was opened in 1997. Tourism is also a mainstay, accounting for about 70% of GDP and 75% of foreign currency earnings.

The official and spoken language is English. The official currency is the Caymanian Dollar. There is no exchange control. The type of law is Common Law based on English Common Law. The Company Law of the Cayman Islands is based on the English Companies Act of 1948 and can be found in the amended Cayman Islands Companies Law of 2002.

Company Information

The formation of a company in the Cayman Islands has many advantages in addition to a well established regulatory regime, flexible company structures and the speed of registration, namely no direct taxation (no corporation, capital gains, payroll, property or withholding taxes) backed by a 30-year Government guarantee, anonymity - protection of the legitimate interests of clients is safeguarded, minimal reporting requirements, ready availability of investment, legal and other advice and good management services at prices competitive with those in other offshore centres, possibility to form a company with only one shareholder with no minimum capitalization requirements.

The type of company for international trade and investment is the Exempt Company. The 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.

The following restrictions on trading apply: an Exempt Company can’t trade within the Cayman Islands or own real estate in the Cayman Islands. It can’t undertake the business of banking, insurance business or mutual fund business unless licensed. It can’t solicit funds from the public.

A Cayman Islands Exempt company has all the powers of a natural person. A registered office is required, it must be maintained in the Cayman Islands. Shelf Companies are available. The minimum time to incorporate is two days.

There are name restrictions on the following words: 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.

Names can be expressed in any language using the Latin alphabet, if the Registrar of Company receives a translation thereof. The corporate documents will however be in English. There is no disclosure of beneficial ownership to government authorities.

Compliance

The minimum authorized and issued share capital is US$ 1, but it is normal to incorporate with an authorized share capital of US$ 42,000; divided in to 42,000 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 part value.

The following classes of shares are permitted: registered shares of par or no par value, preference shares, redeemable shares and voting or non-voting shares. There is no form of taxation in the Cayman Islands relating to individuals, corporations or trusts. The Cayman Islands has no double taxation agreements.

Unregulated exempt companies do not need to file accounts.

The minimum number of directors is one. The directors may be natural persons or corporate bodies. The directors may be of any nationality, and need not be resident in the Cayman Islands.

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. The minimum number of shareholders is one.

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