Why Start-Ups Should Choose to Incorporate in the Cayman Islands
The ease of setting up a corporation in the Cayman Islands is matched only by the benefits that this offshore financial jurisdiction provides to international start-ups.
As well as enjoying the world’s best scuba diving and beaches, the Cayman Islands is also an established global financial centre (the fifth largest banking sector in the world), with a number of major banks, financial institutions, accountancy practices and offshore law firms offering services for incorporating in the Cayman Islands.
The ease of setting up a corporation here means there are a huge number of registered companies in the Cayman Islands corporate registry, more than twice the islands’ population. At least 80 percent of these companies are Exempted Companies with limited liability, which means the owners are living overseas and doing business outside of the Cayman Islands.
The major requirement for opening a Cayman company is to have a registered office and a registered agent physically located in the Cayman Islands. This is a simple step, as there are plenty of Cayman corporate services providers that can provide you with an address and a dedicated agent at very low cost.
Exempted Companies are by far the Cayman’s most popular offshore company, and offer a range of compelling benefits for international start-ups. The formation of a Cayman Islands Company is a tax-efficient solution for international entrepreneurs, with many key benefits, including:
● As a British Overseas Territory, both Caymanian law and the court system are based on English common law. All documents and legislation are in English (the official language of the Cayman Islands)
● There are no annual reporting, accounting or auditing requirements for an Offshore Cayman Islands Company
● Only one shareholder and one director are required. These can be the same person or a corporate body and do not need to include a local citizen
● Perhaps the most well-known aspect of registering in the Cayman Islands is the favorable tax climate. There is absolutely no direct taxation — no corporation, property, capital gains or withholding taxes. This legislation is backed by a 20-year government guarantee (rising to 30 years on application) enabling long-term business planning
● There is no minimum capital requirement for a Cayman Islands company formation
● The business does not need to be run from the Cayman Islands. It can be run from anywhere in the world.
And while other tax havens suffer from a bad reputation and are often blacklisted, the Cayman Islands puts considerable effort into following international tax regulations and reporting, which has so far kept the territory off EU and the OECD tax haven blacklists.
In terms of confidentiality and privacy, the Cayman Islands offers a high degree of investor protection. With no mandatory requirements to submit financial records — or disclose the names of directors, officers or shareholders — a maximum level of confidentiality and anonymity of investors is ensured.
Registration of a Cayman company can usually be achieved within 48 hours, provided all regulatory and compliance requirements are met. Many firms offer professional services for company formation in the Cayman Islands, advising clients on the type of company which will meet their needs, ensuring that the formation process is quick and in full compliance with all regulations.