CAYMAN ISLANDS EXEMPTED COMPANY
The Cayman Islands are a British colony situated in the Caribbean sea approximately 500 miles South of Miami, Florida, with a population of approximately 50,000 people of mixed origin. The Islands enjoy sophisticated legal, accounting and banking services and derive political stability by virtue of their connection with Britain. The legal system is British and the government is headed by a Governor appointed by the Crown who presides over a Government made up of twelve locally elected members and three senior civil servants who hold ex-officio office.
There is no exchange control and no restrictions on the movement of funds to or from the Islands.
The Confidential Relationships (Preservations) Law 1976 makes it a criminal offence for any person to divulge confidential information to a third party and the Cayman Islands have no double taxation treaties with any other part of the world but have undertaken to assist foreign governments by giving them information where a Cayman Island Company has been used or involved in activities which are mutually considered as criminal. Tax offences would not be covered by this treaty so no information would be revealed where allegations of tax offences are made.
The Companies (Amendment) custody of Bearer Shares Law 2001 provides for a licensed Custodian in the Cayman Islands to hold bearer shares to th order of the beneficial owner.
TYPES OF CAYMAN COMPANIES
The registration and regulation of companies are governed by the Companies Law 1998. There are six types of companies available, which include resident, non-resident, exempt, segregated portfolio, limited duration and foreign companies. Please click here for a brief introduction of the types of companies/entities available in Cayman Islands.
The exempt company is the most common type of company used and what follows is for exempted company.
The activities of an exempt company shall be conducted outside the Cayman Islands, though if may hold investments both within and outside the islands.
FEATURES OF CAYMAN EXEMPTED COMPANY
A Cayman Island exempt company has the following characteristics:
Companies can be incorporated with English and/or Chinese names. When a company is incorporated with a Chinese name, the incorporation documents and the Certificate of Incorporation shall contain a translation of the name in English.
The following words cannot be used to name a Cayman company: Assurance, Bank, Trust, Insurance, Chartered, Company Management, Mutual Fund, or Chamber of Commerce, unless the necessary licenses under relevant laws have been obtained.
Memorandum and Articles of Association
The Memorandum & Articles of Association (¨M&A〃) is equivalent to the constitution of a Company in some jurisdictions. The M&A can only be written in English. COLVASS Consulting Limited can provide standard or tailor-made M&A.
Capital and Shareholders
The standard authorized capital of a company is USD50,000 divided into 50,000 shares of USD1.00 each. There is no minimum capitalization requirement. Capital can be expressed in any currency.
An exempt company requires a minimum of one shareholder, who can be an individual or a corporation. Bearer or registered shares are permitted and shares may be issued with nominal or no par value. Details of the shareholders are not maintained on public record. There is no residence requirement for the shareholders.
The register of members (shareholders) of the company must be kept in the registered office in Cayman. The register is not a public record and is only available for inspection by persons authorized by the directors of the company.
Company meeting can be held at any place inside or outside Cayman. No annual general meeting is required.
A minimum of one director is required and corporate director is permitted. Details of the directors must be filed with the Company Registrar but such information is considered highly confidential, not being available to the public. Directors do not have to be shareholders or residents in the Cayman Islands, however, annual meeting of the directors must be held within the Islands every year.
It is not mandatory for the company to appoint a company secretary, but since the Companies Law of Cayman is more stringent than many other jurisdictions, we recommend that our firm be appointed as the Company Secretary to ensure that the company complies with all statutory requirements.
Registered Agent and Registered Office
An Cayman exempt company must at all times have a registered office located within Cayman, which is normally provided by a Cayman management company, law firm, accountancy practice or trust company. An Cayman exempt company can resolve to change the location of the registered office at any time.
Though there is no requirement to engage a registered agent in Cayman, in practice, since all exempt company must have a registered office in Cayman, the service providers providing the registered office will also provide company management services. These services providers are regulated and licensed under the Companies Management Law 1999, which is administrated by the Cayman Islands Monetary Authority. The Law requires the Management company to carry insurance to cover any losses arising from claims of negligence, breach of duty or dishonesty.
There is no requirement to file accounts with the registrar. However, an annual return must be filed. The return takes the form of a simple declaration.
Incorporation time is in the order of 3 to 4 weeks, including delivery time. We do not keep ready-made companies in stock.
There are no taxes in the Cayman Islands on income, capital gains, profits, dividends, investments or capital transfers. The company receives a twenty year guarantee against taxation from the Cayman Islands Government, which may be extended to thirty years on application.
The Confidential Relationship (Preservation) Law 1976 makes it a criminal offence to divulge confidential information or to willfully obtain or attempt to obtain confidential information relating to a Cayman Island company. The Law imposes a maximum penalty of a fine of CI$5,000 and/or a term of imprisonment of up to 2 years.
REGISTRATION AND MAINTENANCE FEES
Our registration fee for a Cayman exempted company with a share capital less than US$50,000 around US$3,200. The fee covers current year licence fee, current year registered agent fee and current year charge for the provision of registered office.
Documents Required for Incorporation
Please click here for detailed list of documents and information required.
Annual Maintenance Fee
Annual maintenance fee for a Cayman exempted company is around USD2,300 which covers annual licence fee, annual registered agent fee and annual registered office fee.
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