What Can You Do with an Offshore Company in Cayman Islands?
What Can You Do with an Offshore Company in Cayman Islands?The most common use for an Offshore Company in the Cayman Islands is trading or holding overseas investments. You cannot hire local employees or engage in any contracts with local residents, so they are best served to foreign activities. With zero taxation, they are an attractive option for those with business interests internationally.
Background & General Outline
The Cayman Islands are an autonomous British Overseas Territory, located in the Caribbean sea. Spread over 102 square miles and with a population of around 66,000 people, it is home to one of the most well known financial service industries in the world.
There are currently over 100,000 registered companies in the country – more than the population. In addition to this, inhabitants of the Cayman Islands have the highest standard of living in the region and its GDP is the 38th highest globally. The local currency, the Cayman Islands dollar is pegged to the US dollar at $1.227 although the US dollar is widely accepted. The local unemployment rate is just 4.24%.
The primary source of income for the government is that of indirect taxation. In terms of the general economy, tourism is a big revenue generator for the Cayman Islands. Famous for its beaches and scuba diving, it brings thousands of visitors each year. Industries such as shipping are also lucrative.
Political Structure & Legal System
The Cayman Islands is a non-self-governing territory and the constitution was ordained via the UK in 2009. It remains a British overseas territory and the Governor is the head of government. The Governor is appointed by the Queen of England and they, in turn, appoint a Premier.
The legal system in the Cayman Islands follows the English common law which is based on precedents. Civil cases are heard in the Summary Court and then decided by a Stipendiary Magistrate.
Name Restrictions for a Company in Cayman Islands
When you incorporate an offshore company in the Cayman Islands, you will find some names are off-limits. These include any names that include “royal”, “chartered”, or “bank”. Names that are similar to another Cayman Islands-registered entity are also prohibited. You can have the name in any language, or a dual name in English and a foreign language. In the case of exempted companies, you are not required to use LTD or Limited at the end of the name.
Trading Restrictions
The only restriction in place is that a Cayman Islands offshore company can not do trade with, or employ anyone in the country. It also cannot conduct business within the Cayman Islands.
Taxation in Cayman Islands
Company incorporation in the Cayman Islands brings with it the benefit of zero taxation. There is no income tax, corporate tax, capital gains tax, gift tax, wealth tax, or inheritance tax. These exemptions apply as long as you are conducting all of your business outside of the country.
Double Taxation Treaties
Due to the Cayman Islands zero tax rate for offshore companies, it previously did not have any double taxation treaties in place. As of 2019, it has entered into limited treaties with the UK and New Zealand, and a comprehensive treaty with Japan. Due to several tax information exchange agreements, the Cayman Islands is no longer on the OECD’s grey list of non-tax compliant jurisdictions.
Accounting & Financial Statements
You are obliged to file a return with the Registrar, notifying them whether you have made any changes to the Memorandum of Association. You are also required to confirm that all business was carried out, outside the country and not locally.
A Cayman Islands Offshore company is also required to keep accounting records that show income, assets, expenditure, and liabilities. These records do not have to be kept in-country but should be available to the government upon request. Audits or the appointment of auditors is not required.
Disclosure of Beneficial Owner
The only documents that are filed with the authorities are the Memorandum of Association and the Articles of Association. These documents are held by the Registrar and are not publicly available.
Capitalization Requirements for a Company in Cayman Islands
If you incorporate an offshore company in the Cayman Islands, there are no formal obligations to put up a minimum authorized capital. Should you choose to pay up capital and it exceeds $50,000 the government imposes a fee at the time of incorporation and then on a yearly basis.
Exchange Control
If you incorporate a company in the Cayman Islands, there are no exchange controls or currency regulations in force.
How Much Does an Offshore Company in Cayman Islands Cost?
You can get your Cayman Islands Company Formation Package for as little as €2,800. To learn what the Formation Package includes, simply check the button below. You can also benefit from our special renewal package and additional optional services.
Contact Us for an Offshore Company in Cayman Islands
Offshore company incorporation in the Cayman Islands provides a range of fiscal benefits and also enjoys a certain level of confidentiality. Enjoying a stable political and economic climate, strong links with the UK, and relatively cost-efficient set up processes, it is a popular choice for those wishing to hold investments or conduct international business. Contact us today to get your company registered in the Cayman Islands.
More Locations to Incorporate Your Company
Not sure about Cayman Islands? No problem! There are several other locations to consider. Select any of the countries below to learn more:
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