Are you looking to take your business global? Then, choosing the Cayman Islands for offshore company formation can be your ticket to accessing the international market. The Cayman Islands are a British Overseas Territory with strong relations with countries around the world. Aside from this, it is also one of the top offshore jurisdictions, known for its robust financial infrastructure.
If you are looking to register your firm in the Cayman Islands, this guide will walk you through the benefits, the company structures you can choose, and the process. Let’s get started and delve into the details.
Why Should You Register in the Cayman Islands?
The Cayman Islands is one of the top jurisdictions for offshore company formation. There are numerous reasons to choose the place to register your incorporation:
- Tax Neutral Environment
The Cayman Islands are known for their tax-neutral environment. The jurisdiction does not levy any corporate income tax, withholding tax, capital gains tax, or so on. That means you do not have to pay any tax on your income as long as your firm satisfies economic substance requirements. However, you may have to comply with the tax obligations of your home country in case you repatriate the income.
- Asset Protection
The jurisdiction boasts a strong legal framework that protects your assets. Some of the common ways to protect your assets are through forming either an offshore holding company or a trust. Both structures allow you to safeguard your assets against foreign judgments and the heirship laws of your home country.
- Global Recognition
The Cayman Islands are a well-known offshore financial center. This contributes to increasing the credibility of your company and attracting foreign investments and clients.
- Stable Environment
The jurisdiction boasts a stable political and economic environment, which keeps your firm’s funds on stable ground. Moreover, you can easily mitigate the instability and risks of your home country through company formation in the Cayman Islands.
- Strategic Location
Located in the Caribbean, the islands offer close proximity to other major jurisdictions. This provides easier international trade and infrastructure for global expansion.
- Top-Notch Legal Environment
The Cayman Islands is a British Overseas Territory, and operates under the British Common Law legal system. This ensures a stable and business-friendly environment that supports growth and expansion. Moreover, it also ensures fast-track resolution of the cases.
What are the Company Structures in the Cayman Islands?
Every structure has different benefits, and you must choose one based on your business goals. The following are some of the top company structures in the Cayman Islands that you can choose from:
- Exempted Company: It is one of the most preferred company structures in the jurisdiction. A Cayman exempted company can conduct operations outside the islands. Aside from this, they can also hold capital in multiple currencies as well.
- Limited Liability Company: A Cayman LLC combines the features of a partnership and a corporation. Thus, through it, taxes can be passed to the owners to avoid double taxation. On top of that, you can have limited liability and only be liable up to the amount of capital invested by you.
- Non-resident Company: This structure is typically suitable for foreign investors. A non-resident company cannot conduct business within the islands, but it easily caters to a foreign audience.
- Segregated Portfolio Company (SPC): It is a type of exempted company typically suitable for insurance and finance-related firms. It has a unique, honeycomb-like structure that segregates your assets and liabilities for each unit of your business.
- Exempt Limited Partnership: Just like a non-resident company, the exempted limited partnership also cannot carry out business locally. Nonetheless, you can operate internationally without any restrictions.
- Limited Duration Company: It is another type of exempted company formed for a specified time period to carry out a particular activity.
- Foundation Company: It is a type of non-profit company that is set up under the Companies Act and cannot distribute profits to its members.
How to Set Up a Company in the Cayman Islands?
You have to fulfill numerous legal and regulatory requirements to set up a company in the Cayman Islands. The following are the steps that you can follow:
Step 1: Hire an Expert Consultant
It is advisable to hire a business consultant to assist you with company incorporation in this British Overseas Territory. A consultant will help you meet the regulations and fulfill the formalities, as they have a deep understanding of the local requirements.
Step 2: Select a Legal Structure
Select a company structure from the ones described above. You can assess and choose them based on your business requirements. Moreover, your business consultant will also assist you with making an informed decision.
Step 3: Choose a Business Name
Research the right name that reflects your business goals and mission. Ensure it complies with the criteria set by law. Aside from this, the name must not be misleading or imitate an existing company’s name.
Step 4: Fill Out the Application Form
Once you have chosen a name, go ahead with completing the application form. A form typically requires your firm’s name, address, and other significant details.
Step 5: Draft and Compile Documents
Along with the application form, you also have to draft and compile documents such as copies of identification documents, the memorandum of association, the articles of association, a business plan, and so on. Your agent will guide you through the documents required.
Step 6: Wait for Approval
Once the company registration number is generated, our company professionals will courier the certificate of incorporation. Once you receive it, you can legally operate internationally through your Cayman company.
International expansion is a big step for every business and requires careful assessment of the jurisdiction you choose. On top of that, navigating the legal requirements can be tedious and requires legal guidance. It is advisable to appoint a consultant to fast-track the process without any discrepancies.
