Company Formation in Cayman Islands

Incorporation process in the Cayman Islands

Although simple and fast, Cayman company incorporation goes through a structured path of key steps. 

Necessary documents

The Cayman Islands requires minimal documentary requirements for company formation in its jurisdiction. This includes a duly accomplished company formation application, the company’s article of association and the memorandum of association.  A declaration of compliance to the country’s laws and regulations is also required. Additionally, personal documents of the registering individual or business owner such as proof of identity and address of shareholders, directors, and beneficial owners should also be submitted.

Notarization of the documents is required. Apostille Cayman Islands incorporation is possible to facilitate the notarization process, as this jurisdiction is part of the Hague Convention since 1975.

No minimum share capital is mandated by the law for incorporation. Companies are allowed incorporation with zero to a nominal share capital, usually set at USD 1 or its equivalent in another currency.  These nominal shares serve as formality rather than a financial obligation. They indicate company ownership of the established entity.

Remote incorporation

The Cayman Islands allows a fully remote incorporation. It promotes a streamlined process wherein individuals and businesses are allowed to establish a company without physically being present in the jurisdiction. This particular approach is highly favorable for international entrepreneurs and investors who are looking to maximize the tax benefits and leverage on the business-friendly environment in the Caymans. All necessary documents can be submitted online utilizing digital channels. 

Individuals who are opting for a fully remote incorporation, however, should appoint a reliable legal partner such as LegalBison’s experts to assist in the remote incorporation process. This ensures the whole company formation procedure is in compliance to set standards thereby eliminating future problems due to overlooked matters. 

How to: registration company in the Cayman Islands

Registering a company in the Cayman Islands begins with the planning phase. In this stage, business owners must specifically determine and define the role and objectives of the company to be established. A unique name is then chosen, and the shareholder structure is determined.

After the details are laid out, the incorporation process begins. LegalBison facilitates the whole procedure from the submission of all the necessary legal and documentary compliance to the final approval of the company. Throughout the incorporation process, the team gives updates to the client through email to ensure transparency. When the company finally gets an approval, the team provides the client a comprehensive set of corporate legal documents for their records.

The third stage is the opening of a bank account. Creating accounts for offshore entities are a little bit challenging due to international regulations and requirements. The appointed team also provides assistance in this phase to reduce the burden from clients. However, they can not guarantee the bank’s approval hence banks have their own criteria and set standards for account opening. Nevertheless, bringing in a team of experts to the table ensures a seamless experience during the registration and bank account opening phases.

Accounting and auditing in the Cayman Islands

When it comes to accounting and auditing, business entities established within Cayman Islands enjoy more freedom and flexibility due to its eased regulatory requirements.

Accounting and Bookkeeping

Cayman Islands does not require offshore businesses under its jurisdiction to conduct periodic accounting and bookkeeping processes as they are exempt from local taxation and reporting requirements. This simplifies the administrative process and reduces burden from their corporate operations.

Auditing requirements

Cayman Islands does not require auditing to offshore companies within its jurisdiction as they are exempt from local taxation and reporting obligations. This provides further flexibility and reduces regulatory burdens for companies operating solely in an offshore capacity.

Company registry in the Cayman Islands

The Cayman Islands maintain a company registry that serves as the official repository of information for registered companies, providing transparency, accessibility, and legal documentation for businesses operating within the jurisdiction. 

Registry of directors in the Cayman Islands

As published under the Cayman Islands General Registry website, the registry of directors of offshore companies within its jurisdiction is not accessible to the public. This enables protection of the legitimate interests of entrepreneurs, businessmen and investors in the area.

The government, however, established mechanisms to assure the highest standards of integrity throughout the Cayman’s financial industry. The office can only release the name, type of company, the date of registration, the address of its registered office, and the status of the company upon request from competent authorities. Except where assistance to law enforcement agencies to combat illicit activity is mandated or authorized, disclosure of information by government officials, professional agents, attorneys and accountants and their staffs is prohibited. In requesting information, a standard procedure must be followed and complied with. 

Registry of shareholders in the Cayman Islands

As published under its government website, the registry of shareholders in Cayman Islands is also not publicly accessible. Said information is maintained by the companies themselves.

Only authorized personnel, regulatory bodies, and designated agents appointed by the company can have access to the registry in order to ensure that sensitive information regarding the company shareholders are kept confidential and is not used for malicious intents. This confidentiality extends to the details of share ownership that they have within the company.

Said privacy measure expresses Cayman Islands’ commitment to protect the sensitive information of companies within their zone. However, entities operating under its jurisdiction are still required to comply with set minimal legal requirements regarding information disclosure. 

Are nominee services legal in the Cayman Islands

Cayman Islands authorizes the utilization of nominees within its jurisdiction. This involves appointing a nominee director to act on behalf of the beneficiary owner. The nominee director’s name will be the one reflected on the company’s legal documents submitted during the registration process as well as in files submitted to the Company Registry. This ensures absolute privacy and confidentiality to beneficial owners.

It must be noted, however, that Cayman Islands regulate nominee through a set legal and regulatory requirements.

Individuals who opt for this method must seek professional advice and guidance from reputable experts like LegalBison to ensure thorough understanding on nominee services process and requirements.

Substance and residency in the Cayman Islands

The Cayman Islands upholds minimum standards for corporate entities within its jurisdiction.

Economic substance in the Cayman Islands

Cayman Islands requires offshore companies to conduct substantial corporate and income- generating activities within the country.  They are also required to have a physical address, an actual office, and have local residents as their employees. Such measures ensure active engagement in real economic activities that contribute to the local economy. 

Additionally, it enhances Cayman Islands’ reputation as a legitimate and transparent financial center. 

Residency requirements of shareholders and directors in the Cayman Islands

Cayman Islands does not have specific requirements on  residency towards companies registered within the jurisdiction. Owners, shareholders, and directors are not obliged to apply for citizenship in the country in order to keep their business running. Non-residents may be appointed for their business management and administration.

However, while there is no residency requirement, companies are still required to maintain economic substance in the area by having a sufficient level of operational presence in the Cayman Islands. Also, a certain number of employees from the local community must be maintained to ensure compliance with the set substance regulations.

Banking with a Cayman Islands company

Account opening and banking operations are a bit complex in offshore jurisdictions.This is due to international banking regulations and requirements that must be met. Additionally, financial institutions have different criteria for the approval of account applications.

It is important to seek expert’s guidance in this aspect to ensure compliance to requirements. LegalBison has a team of experts that facilitates the bank selection and  account opening processes. Additionally, the team ensures compliance with the anti-money laundering regulations to make sure that clients will not face legal impediments after their company formation. 

Company types in the Cayman Islands

Cayman Islands allows for various company types that cater to diverse business needs thus offering them flexibility and regulatory advantages. 

Exempted Companies

An exempted company is defined as a distinct legal entity capable of carrying out all of the functions of a full-capacity natural person, regardless of corporate benefit, and with perpetual succession. Exempted Companies established in the Cayman Islands enjoy a lot of benefits which include 100% foreign ownership, zero taxes, heightened privacy, limited liability, greater control, and absence of required financial reporting and audits. This company type is well-known to businesses which conduct business activities internationally. 

Foundation

Foundations are corporate entities with limited liability and have separate legal personalities from its owners and directors. It can hold property in its own name. They are most often established for philanthropic causes like charities, science, and arts. or private wealth management. This company type provides asset protection, estate planning, and charitable giving opportunities for individuals and organizations.