5 Supreme Benefits of Exempted Company Formation in the Cayman Islands
The Cayman Islands is a preferred jurisdiction for offshore company formation and financial institutions. There are almost 100,000 offshore companies in the Cayman Islands, higher than its population. Can you believe that?
Why do companies choose to set up offshore companies in the Cayman Islands?
- Flexible structures
- Ease in incorporation
- Financial assistance
- Use of share premium
- Stamp duty on share transfer
- Tax neutrality
- Merger opportunities
- Commercial confidentiality
- Legal framework
- Robust infrastructure
- Business-friendly climate
An exempted company is a business entity registered within the Cayman Islands and with the Cayman Islands company, but it conducts business outside the geographical boundaries of the Cayman Islands.
The most significant benefit of an exempted company is that it allows organisations to carry out business activities outside the country while enjoying Cayman’s tax neutrality.
In this blog, we will discuss the benefits of exempted company formation in the Cayman Islands.
5 Major Reasons to Choose an Exempted Company Formation Structure For Your Offshore Business
1. Fast Incorporation — Establishing a Cayman Islands exempted company requires little paperwork, and the process does not take more than 3 to 5 business days, provided all the necessary paperwork is in order.
2. Zero direct taxation — The owner of an exempted company can obtain a 20 year Cayman government guarantee stating that the business won’t be subject to any taxation. These taxes include corporate taxes, capital gains taxes, payroll taxes, inheritance taxes, and others.
3. Global operations — With an exempted company formation, a company can perform business-related activities outside the country, receive income from international clients while benefiting from tax-neutrality.
4. Offshore management — There is no compulsion for an extended company to be managed locally. One can manage it from an overseas location.
5. Fewer management restrictions — Only one shareholder and one director is enough to incorporate an exempted Cayman company. They can be the same person, and total foreign ownership is acceptable.
Apart from the advantages mentioned above, an exempted company does not require complicated and labour-intensive accounting procedures & annual audits. Moreover, there is no need to worry about investor protection or privacy because under an exempted company formation; it is not mandatory to disclose the identity of the shareholder or the director.
Procedure to Incorporate a Cayman Exempted Company
To incorporate a Cayman-exempted company, it is necessary to submit the original Memorandum of Association and Articles plus an appropriate incorporation fee to the Registrar. Apart from that, a declaration signed by the company’s subscriber must be presented to the Registrar. The declaration should clearly state that the company will conduct business outside the Cayman Islands only.
Generally, it takes 3 to 5 business days to register a Cayman exempted company. The incorporation procedure for a Cayman-exempted company is quite simple and organised.
However, you need to ensure that this company formation is appropriate for you. Proper documentation and knowledge of the formalities are vital to assure a smooth incorporation process.
If you need help with Cayman company formation, give us a call to schedule an appointment. We will be happy to assist you.