Cayman Islands

Doing Business in Cayman Islands

Introduction

The Cayman Islands consists of a group of three islands in the Caribbean: Little Cayman, Cayman Brac and Grand Cayman. The main Island, Grand Cayman, is situated approximately 480 miles southeast of Miami.

Population

The population is approximately 58,000.

Political Structure

The Cayman Islands are a British colony and therefore the United Kingdom Parliament at Westminster retains the right to legislate. A “Governor” who is appointed by Queen Elizabeth II heads the Cayman Islands Government. There is a Legislative Assembly consisting of 18 seats; 3 appointed members from the Executive Council (Financial Secretary, the Attorney General, and Administrative Secretary) and 15 members elected by popular vote. An Executive Council, consisting of three official members appointed by the Governor and four members elected by the Legislative Assembly, formulates policy and advises the Governor. Appointments are to a four-year term.

Infrastructure and Economy

The economy of the Islands is strong, enjoying full employment with most of the revenue being derived from the financial services sector and tourism. Miami is one hour away by air and the Island has direct air links with New York, Atlanta, Tampa, Houston and Jamaica. The Islands are a popular cruise-ship stop.

Language

The official and spoken language is English.

Currency

The official currency is the Caymanian Dollar.

Authorised and Issued Share Capital

There is no authorized and issued share capital.

Type of Law

Common Law based on English Common Law.

Company Information

Procedure to Incorporate

For Exempt Companies, the procedure entails the 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.

Restrictions on Trading

The company cannot trade within the Cayman Islands; own real estate in the Cayman Islands; nor undertake the business of banking, insurance business, or mutual fund business unless licensed. It also cannot solicit funds from the public.

Powers of Company

A Cayman Islands Exempt company has all the powers of a natural person.

Language of Legislation and Corporate Documents

The language of legislation and corporate documents is English.

An Arabic language facility was enabled in 2007.

Registered Office Required

Yes, a registered office must be maintained in the Cayman Islands.

Time to Incorporate

It takes two days to incorporate a company in the Cayman Islands.

Name Restrictions

The restricted names include 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.

Language of Name

Names can be expressed in any language using the Latin alphabet, Chinese or Arabic, if the Registrar of Company receives a translation thereof. The corporate documents will however be in English.

Names Requiring Consent or a Licence

Bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, asset management, trust, trustees or their foreign language equivalent.

Suffixes to Denote Limited Liability

There is no requirement to utilise a suffix to denote limited liability, although normally companies are incorporated to include the suffixes Limited, Incorporated, Corporation or their abbreviations.

Disclosure of Beneficial Ownership

Beneficial ownership is not necessarily disclosed.

Compliance

Authorised and Issued Share Capital

The minimum is US$1, but it is normal to incorporate with an authorised share capital of US$50,000 divided into 50,000 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 par value.

Classes of Shares Permitted

Registered shares of par or no par value, preference shares, redeemable shares and voting or non-voting shares are permitted. Bearer shares may be issued but must be held by an authorised depository.

Taxation

There is no form of taxation in the Cayman Islands relating to individuals, corporations or trusts.

Double Taxation Agreements

The Cayman Islands has no double tax agreements.

Financial Statements Requirements

Companies (Amendment) Law 2010 states that “Every company shall cause to be kept 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.

Unregulated exempt companies do not need to file accounts.

Directors

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

Company 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.

NB Effective 18 January 2013 the penalty under Section 56 for failing to file a notice of change in a director or officer has increased to an initial fine of $1,220 plus extra $122 a day for each director that is past due 90 days up to a maximum of 5 days, i.e., $610.

Shareholders

The minimum number of shareholders is one.

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