Company formation in the Cayman Islands Overview
The Cayman Islands, a small British Crown territory, have become one of the giants of the offshore business. A stable political system with the rule of English law, a favorable tax environment, and fast document processing have encouraged more than 100,000 companies to register. On average, about 10,000 new companies are registered in the Cayman Islands each year.
Financial activities are controlled by the Cayman Islands Monetary Authority (CIMA). The regulator has issued licenses to 87 banks, including some of the world’s largest financial institutions, and continues to oversee the activities of 133 trust companies and about 13,000 mutual funds. This small area has become a global financial intermediary and ranks 18th in the world in terms of cross-border assets, with US$472.5 billion (80% of which is interbank transactions).
Time to register a company
within 48 hours
Average register a company timeline
Typical initial capital
US$1
The minimum initial capital
Tax rate
0%
Corporate tax rate
The Cayman Islands authorities have formed a special unit and strengthened KYC/AML compliance, which allowed them to be removed from the FATF’s “grey list” in 2023. This has improved the investment climate and confirmed the safety of doing business. The Companies Act 1961 (last amended in 2020) provides businesses with a wide range of jurisdictional opportunities and benefits, asset protection, and an effective tax system.
General information
| Country name | Cayman Islands |
| Capital | George Town |
| Official language | English |
| Currency | Cayman Islands dollar (KYD) |
| Time zone | Eastern Standard Time (UTC-5) |
| Business entities | Exempt companies, ordinary non-resident companies, limited liability companies (LLCs), partnerships |
| Regulatory authority | Cayman Islands Monetary Authority (CIMA) and Registrar of Companies |
| Foreign ownership | 100% foreign ownership is permitted for most types of businesses. |
Cost of Company Formation in Cayman Islands
The standard procedure for obtaining a certificate of official registration in the General Register of Companies takes up to one week, but an expedited process is available for an additional fee — within 1 day.
The all-inclusive package for registering an offshore company in the Cayman Islands includes:
- Submission of an application to the registry, signing of the company registration application, and obtaining a certificate of registration on its behalf.
- Preparation of all primary documents: memorandum of association, articles of association, minutes of shareholders’ meetings, merger/reorganization agreements, etc.
- Drafting resolutions appointing a manager.
- Preparation of the shareholders’ decision on the initial issue of shares.
- Registration of a local legal address.
- Preparation of a list of all shareholders entering information about the ultimate beneficiary in the register.
- Notarization of all necessary documents.
- Payment of state fees to the General Register.
- Delivery of documents to the address.
Ready to Start Your Company in the Cayman Islands?
Our experts will accompany you at every stage of the opening process, ensuring its smoothness and efficiency.
Advantages of Company Registration in the Cayman Islands
Tax Benefits
As a rule, a recognized offshore jurisdiction with a neutral tax system makes businesspeople think about how to start a business in the Cayman Islands. The tax regime of the Cayman Islands does not provide for income tax, capital gains tax, inheritance or gift tax, or transfer tax; stamp duty is levied only in certain cases. Another option is to obtain a 50-year tax exemption certificate. There are also no currency controls or restrictions on the movement of funds. Tax optimization gives a powerful boost to business and the opportunity to redirect resources to the development of new areas.
Fast Set-Up of a Company
Registering a company in the Cayman Islands can take as little as one day. No financial reporting is required, except for investment funds, low annual fees for registration renewal, and the ability to appoint a non-resident director greatly simplifies the collection and submission of documents to the Registrar. Activities related to investment and financial services, ship operation, insurance, and intellectual property use are licensed on the islands.
Cayman Islands as a Financial Services Center
El Salvador has 17 free trade zones (FTZs) that offer companies operating within their territory a range of tax incentives and Many companies have decided to open an offshore company in the Cayman Islands due to its economic stability and wide range of accounting, insurance, and leasing services. The ease of doing business has led to the establishment of 116,996 companies, including 724 insurance companies, 87 banks, and 12,963 investment funds. benefits. These free trade zones create attractive conditions for manufacturing, export-oriented, and logistics companies. They also provide access to a wide range of international markets.
Privacy and Confidentiality
The algorithm for registering a company in the Cayman Islands is carried out without public disclosure of information about the ultimate beneficiary, shareholders, and general managers. Registers of directors and shareholders are kept where necessary for the company. The use of nominee managers and shareholders is also permitted. The islands observe investment secrecy and account anonymity, where non-disclosure of information about investment transactions is permitted. There are no restrictions on the choice of bank for servicing and the number of corporate accounts.
Financial Reporting for Cayman Islands Companies
Registering a business in the Cayman Islands gives companies the freedom to decide how to conduct financial reporting (in any country in the world), there is no requirement to submit an annual report, and there are no criteria for maintaining accounting records.
Apostille/Notarization/Legalization
The registration of foreign companies in the Cayman Islands can be expedited remotely by issuing a power of attorney to a representative with notarization of the set of constituent documents and apostille.
Service packages for registration in Cayman
Popular activities of company types registered in the Cayman Islands
Doing business in an offshore zone allows you to choose different types of structures, including the creation of a company with a segregated portfolio or a company with a limited life. This helps companies adapt and create companies for specific needs. This economic region is mainly chosen by investment companies, funds, trusts, and holding companies.
The main types of companies include:
- Ordinary company – Ordinary company (resident and non-resident).
- Exempt company – Exempt company.
- Foreign company – Foreign company.
- Limited liability company (LLC).
Ordinary Company
An ordinary resident company is required to comply with all local laws when conducting business, submit financial statements, have a registered office, and the register of all shareholders must be publicly available.
An ordinary non-resident company is not entitled to conduct business on the islands, must obtain a certificate confirming its non-resident status, and must file financial statements.
Exempted Company
For a number of reasons, investors most often choose an exempted company to conduct business. When establishing such an organization, there are no requirements for holding a mandatory annual shareholders’ meeting or for the amount of initial capital. The company is established with at least one shareholder and one manager. When establishing an exempted company, there is no requirement to publicly disclose information about the company’s managers and owners. A tax exemption certificate is also issued for a period of up to 20 years.
An exempt company is divided into subtypes:
- With a segregated portfolio.
- Non-profit association.
- Foundation.
- Limited life company.
- Special economic zone company.
Foreign Company
Cayman Islands law allows a foreign company registered outside the jurisdiction and incurring expenses for the establishment of a company outside the jurisdiction to own land and conduct commercial activities with other companies already located on the islands.
LLC
One of the most common models of investment business is an LLC. Features of this type: activities are conducted outside the islands, owners are not liable for the company’s obligations, information about shareholders and managers is not disclosed, an annual report is submitted to the Registrar, and a state fee is paid.
Trusts
The number of registered trusts in the Cayman Islands has already exceeded 2,300, and up to 10 new trusts are added every month. The Trusts Act (as amended) has become the main legal norm.
The most common types of trusts are:
- Discretionary and fixed interest trusts.
- STAR trusts.
- Non-charitable and charitable residual trusts.
Investors use the advantages of trust registration to protect and preserve assets (capital, antiques, other valuables), to avoid the procedure of drawing up a will when owning large amounts of capital, to maintain the confidentiality of the owner’s data, as well as for charitable purposes.
Holding
To optimize taxation and simplify business operations, many corporations prefer to register their businesses in the Cayman Islands. Holding companies are used to manage capital, protect assets from litigation in other jurisdictions, and maintain confidentiality. A holding company is required to provide financial statements as proof of its economic presence.
Approximately 450 companies registered in the Cayman Islands are listed on the NYSE/Nasdaq, and 1,700 are listed in Hong Kong.
Financial Services
Financial services are well developed in the Cayman Islands. The banking structure consists of 87 banks, 11 of which are category A banks with the right to serve local clients. Among the leading financial institutions are major market operators such as Scotiabank, Butterfield Bank, Royal Bank of Canada, and Fidelity Bank. According to statistics, banks in this jurisdiction hold $80 billion in deposits.
| Exempt company The most common type, ideal for international business | does not require local commercial activity. |
| Ordinary non-resident company Primarily for foreign investors | subject to local legislation but not required to pay local taxes. |
| Limited liability company (LLC) Provides flexibility in management | requires a minimum of 1 member, but can have a maximum of 50 members. |
| Partnership Limited liability partnerships and exempt limited liability partnerships are available | no formal registration is required. |
Process for Opening a Company in the Cayman Islands
Once all the incorporation documents have been gathered, the process of registering a new company is quick and efficient, allowing you to start operating in your chosen jurisdiction within a few days.
Registration process and company formation timeframe
In the Cayman Islands, you can obtain a certificate of incorporation within 48 hours by completing an expedited registration procedure. Key documents, including financial statements, can be stored in any country.
Mandatory requirements include:
Check the availability of your chosen trade name and register it with the El Salvador Trade Registry.
Preparation of legal documentation
Company members
The standard process of legal registration of a business and compliance with all anti-money laundering regulations requires at least one director and one shareholder (may be the same person). It is permissible to appoint a nominee director and shareholder.
Company documents
All necessary KYC documents, minutes, and financial statements of the company are stored in a location and country chosen by the company itself.
Remote registration
The CIMA financial services authority allows you to optimize the registration process by registering your business remotely from anywhere in the world, saving entrepreneurs time and additional costs.
Post-registration procedures
The Cayman Islands are among the five largest financial centers and are renowned for their developed offshore banking. After receiving an official certificate of company registration, the next step is to open an account. Another advantage is the unlimited number of transactions and bank accounts, which only increases the efficiency of the company’s operations.
One of the peculiarities is the need to register with the Immigration Department when hiring employees.
Licensing of activities is carried out on the basis of the provisions of the Trade and Business Licensing Act. A license is required if 60% of the company is owned by residents of the Cayman Islands to carry out crypto activities (VASP), and a trust license is issued to provide trust financial services to banking structures.
Ready to Start Your Company in the Cayman Islands?
Our experts will accompany you at every stage of the opening process, ensuring its smoothness and efficiency.
Documents required to open a company in the Cayman Islands
The jurisdiction offers excellent business opportunities, which are successfully used by many international companies, their representative offices, and private clients. Legalizing a business requires collecting a set of documents, passing a KYC check, and complying with regulatory requirements to obtain a license.
Required documents
Any registration process begins with the preparation of a set of documents, which consists of:
- Application for registration with the Registrar General of Companies.
- Basic documents such as the Articles of Association and Memorandum of Association, as well as the Memorandum of Association and Memorandum of Association.
- Minutes of the shareholders’ meeting.
- Minutes of the meeting of managing directors.
- Register of shareholders (minimum number of shareholders is 1, who may be either individuals or legal entities, residents of any country).
- Register of beneficiaries.
- Register of directors.
- Decision on the appointment of a manager (no residency requirements), notification of a change/change in the management structure. Consent of the manager to take office. Both legal entities and individuals can be appointed as managers. If a nominee director is appointed, an apostilled power of attorney, a declaration on the provision of nominee director services, and a letter of consent to take office must be provided.
- Information about directors and owners required for the KYC procedure.
- Decision on the issue of shares.
- Share certificate.
KYC document checklist
The UK is on the FATF’s “white list” because it requires companies to comply with KYC/AML rules and relevant international standards. Companies are required to provide the following information:
- Managers, owners, beneficiaries – passport details with proof of residence (utility bill, bank statement, etc.). Company directors provide a resume or link to their professional profile.
- Key documents, registers of managers and shareholders, list of authorized persons signing documents on behalf of the company, and financial statements (if available).
Applicable legal framework and rules
The main rules for doing business are set out in regulations such as:
Taxation System in the Cayman Islands
The Cayman Islands’ status as one of the world’s leading offshore financial centers has helped it adopt the following taxation system:
- 0% corporate income tax.
- 0% VAT.
- 0% capital gains tax.
- 0% tax on dividends and royalties.
- 0% income tax for individuals.
- Stamp duty on real estate leases is 5–20%, and on land leases is 5%.
- Import duties 22–27%.
- No currency controls.
- State fees for company registration depend on the initial capital.
Corporate Tax
The tax neutrality of an offshore jurisdiction with zero corporate tax facilitates the scaling of operations by investing additional funds in the business. The authorities issue a Tax Exemption Certificate (TEC) for a period of 20 years, which allows you to avoid paying taxes in the event of a change in local accounting policy.
Mandatory government fees include the payment of an annual fee for the renewal of official registration. The amount of the fee varies depending on the chosen legal form and capital; the data is available on the General Registrar’s website.
International Tax Treaties
The Cayman Islands cooperate with the OECD, automatically exchange financial information with 130 countries, and have signed tax information exchange agreements with 36 countries. This is done to identify tax violations and other tax accounting irregularities.
Accounting and Auditing
Accounting/auditing plays a key role in the activities of any corporation. Paying all taxes on capital gains, corporate tax, etc. helps to maintain the effective operation of the company in accordance with local legislation and avoid penalties.
Accounting and Bookkeeping
Proper company management involves maintaining accounting records. The company’s financial statements must be kept for up to 5 years. The jurisdiction has simplified requirements for most companies (Section 193 of the Companies Act), the main criterion being the submission of reports/notifications to the Registrar that no changes have been made to the company’s structure during the year and that the main activity is carried out outside the economic zone. Tax returns must be filed even if the company is exempt from paying taxes.
Certain types of businesses, such as insurance activities, report to the Insurance Regulatory Authority (CIRA), and financial companies submit statistical reports to CIMA.
Failure to comply with these rules will result in license revocation, deregistration, and fines.
Audit requirements
If the types of economic entities fall into the exempt category, an audit is not required.
| Corporate tax rate | 0% for tax-exempt companies (no corporate income tax). |
| Personal income tax | 0% (no income tax). |
| Withholding tax | 0% on dividends, interest, and royalties paid to non-residents. |
| Stamp duty | Typically, the rate is 7.5% on the transfer of real estate; varies depending on the specific transaction. |
| International Business Company (IBC) fees | The annual government fee ranges from US$850 to US$3,000 depending on the size of the authorized capital. |
| Property tax | Property tax is 0%, although there may be costs associated with renting. |
Crypto and Bitcoin in the Cayman Islands
CIMA supervises cryptocurrency activities, including cryptocurrency exchanges, funds, and brokers, and decides on the issuance of VASP licenses. From 2022, the VASP Act establishes the legality of cryptocurrencies and the licensing procedure for any companies, including ready-made companies, that engage in the long-term or short-term exchange of fiat and cryptocurrency coins, transfer, storage, and issuance of tokens. According to the VASP, a virtual asset is a digital representation of value that can be used for payment, sale, or exchange, but is not equivalent to fiat currencies.
There are no restrictions on the personal use, purchase, or transfer of bitcoins and other cryptocurrencies. Cryptocurrencies are not subject to taxation.
Company Registry and Nominee Services
Cayman Islands legislation has been developed in accordance with all international standards, both in the field of accounting and in the authorization and exchange of information on financial transactions. Any legal entity can obtain the status of an offshore company by registering, and then take advantage of the tax environment and provide its services worldwide.
The register of directors in this jurisdiction is not publicly available, which provides a certain degree of protection for the business and its activities. Access to data is provided upon request by law enforcement agencies.
The company’s founding documents specify the currency and amount of the authorized capital. The average amount in this zone is US$50,000. The register of shareholders, beneficiaries, and directors is maintained in the General Register. The data in this register is only available to government agencies; there is no public access to it, and no one can find out who owns the company and how many shares it owns. The jurisdiction fully ensures the anonymity of the data.
The jurisdiction allows the use of nominee directors and nominee shareholders, which ensures the confidentiality of the company’s owners. In this case, additional documents: powers of attorney, letters of consent, statements, etc. — are submitted when registering the company.
| Minimum number of directors | At least 1 director is required; this can be a natural or legal person. |
| Shareholder residency requirement | There are no residency requirements for shareholders; they may be non-residents. |
| Entry of data in the public register | Basic information about directors and shareholders is entered into the public register. |
| Bearer shares | Bearer shares are not permitted in the Cayman Islands, which increases transparency. |
Substance and residency
In 2019, the International Tax Cooperation (Economic Presence) Law came into force in the Cayman Islands. From that moment on, non-resident companies must conduct business on the islands, hire local staff, have a registered office, and incur commercial expenses.
Economic presence
Economic presence in the jurisdiction must be confirmed by companies such as:
- Banks.
- Insurance companies.
- Leasing services.
- Fund management.
- Affiliated company/headquarters.
- Intellectual property activities.
- Delivery and transportation.
- Holding companies.
Banking for a company in the Cayman Islands
Banking services have been provided by both local and foreign banks for over 30 years. Most of them are branches of large banks in North and South America, as well as Europe. When applying to a bank, you must provide a complete set of documents, including information about directors and managers, to confirm the source of income. The account is opened within five days. Banking transactions are confidential, banking secrecy is observed, the number of accounts opened is not limited, and the account balance can be zero. Online banking is also well developed, allowing you to make bank transfers remotely.
Banking
| State-owned banks | The banking sector is mainly privately owned; there are no state-owned banks. |
| Central bank | The Cayman Islands Monetary Authority (CIMA) regulates banking and financial services. |
| Number of banks | Approximately 30 banks, including local and international institutions. |
| Credit rating | Rated A by S&P and A2 by Moody’s, indicating high creditworthiness. |
| Corruption ranking | Generally considered a country with a low risk of corruption, ranking 4th in the world according to Transparency International. |
| Judicial system | An independent and authoritative judicial system based on English common law. |
Business sectors and opportunities
| Financial services | The Cayman Islands is a major offshore financial center with numerous banks and investment companies. |
| Tourism and hospitality | Significant growth potential in the tourism sector, particularly in the areas of luxury resorts and ecotourism. |
| Medical services | Opportunities to invest in healthcare facilities and services serving the growing expat community. |
| Real Estate Development | The real estate market is booming, opening up opportunities for residential, commercial, and tourism development. |
Corporate structure
| Local Registered Office | Mandatory for all companies; a physical address in the Cayman Islands is required. |
| Local Registered Agent | Mandatory appointment of a local registered agent to ensure compliance and liaison with local authorities. |
Corporate Governance
| Annual general meetings (AGM) | Not mandatory for exempt companies, but meeting minutes must be kept. |
| Disclosure requirements | Limited disclosure requirements: financial records must be kept but are not subject to public access. |
About company registration in the Cayman Islands (FAQ)
How to open a company in the Cayman Islands?
To open a company in the Cayman Islands, select the type of company, reserve a unique name, appoint directors and shareholders, specify the office address, prepare the necessary documents, and submit an application to the Companies Registry. Pay the registration fee, wait for approval, and receive a certificate of registration.
How much does it cost to start a company in the Cayman Islands?
The cost of registering a company in El Salvador can vary depending on a number of factors, including the type of legal structure, legal assistance services, and additional fees associated with the registration process.
How long does it take to register a company in the Cayman Islands?
The time it takes to register a company in the Cayman Islands can vary depending on a number of factors, including the type of company and the completeness of the documents provided. In total, the entire process from reserving a name to obtaining a certificate of registration can take 2 to 4 weeks, provided that all documents are in order.
Can a foreigner open a business in the Cayman Islands?
Yes, foreigners can open a business in the Cayman Islands. The Cayman Islands create a favorable business environment by encouraging foreign investment. As an individual or legal entity outside this jurisdiction, you can establish various types of companies, such as exempt companies, limited liability companies (LLCs), partnerships, and others.
Why do people register companies in the Cayman Islands?
Companies registered in the Cayman Islands are popular due to the absence of direct taxes, a high level of financial confidentiality, a stable legal system, and a flexible company structure. This jurisdiction also provides opportunities for asset protection and the free movement of funds in various currencies. The Cayman Islands are an international financial center that attracts various companies from around the world.
Is Cayman Island tax-free?
The Cayman Islands are often considered a tax-neutral jurisdiction rather than completely tax-free. There is no direct corporate tax, capital gains tax, or inheritance tax, but companies are subject to certain fees, such as registration fees and annual fees. In addition, individuals or organizations conducting business outside the Cayman Islands may be subject to taxation in their home countries.
What are the disadvantages of incorporating in the Cayman Islands?
Registering a company in the Cayman Islands has its advantages, but there are also disadvantages. The Cayman Islands have been repeatedly criticized for being used in some cases for tax evasion and money laundering. This can create reputational risks for companies operating in this jurisdiction. The Cayman Islands themselves have a small local market, which may not be the best option for companies that focus primarily on local customers.
