Located in the western Caribbean Sea, the Cayman Islands is an overseas territory of the United Kingdom. In recent years, the Cayman Islands company law has formed a reputation of creating a business friendly environment with minimum requirements pertaining to company formation in the Cayman Islands. As of 2016, more than 99,000 active companies were registered in the Cayman Islands, including almost 300 banks, 750 insurers, and 10,500 mutual funds.
The requirements surrounding Cayman Islands company formation are among the most relaxed in the world. A minimum of one shareholder is required, who may either be a person or another company or trust. In addition, at least one director is required for company formation although there are no residency requirements regarding a Cayman Island company’s director or company secretary. Lastly, the Cayman Islands does not impose a minimum requirement for authorized capital shares
No. Company formation in the Cayman Islands can be completed abroad with the help of a professional service provider!
If you are contemplating company formation in the Cayman Islands as an individual, a residential address is required. For companies who wish to form a subsidiary in the Cayman Islands, a registered office address or business address is required.
The ES Laws were introduced by the Organisation for Economic Co-operation and Development (“OECD”) with the intention to address profits being earned by offshore companies in jurisdictions such as those mentioned above. The laws state that profits being earned by offshore companies need to be aligned to where the business or profit-generating activities are being carried out, thus potentially affecting the tax outcome.
Effective from 1 January 2019, the law stipulates that companies who carry out “relevant activities” in the countries where the ES Laws are applicable, will be required to maintain an increased level of substance in their incorporated jurisdiction. Such activities are broadly defined to include a wide range of business activities, including fund management, distribution and service center businesses, holding company businesses, finance and many more. In the past, most companies did not maintain much substance in their jurisdiction. Companies who wish to incorporate must now take this new law under consideration.
To determine if your company registered in one of the above jurisdictions is conducting “relevant activities” applicable under ES Laws, one must determine whether they meet the various criteria set for each industry.
As the laws and criteria for each “relevant activity” varies among each industry, it is recommended to obtain assistance from a recognised company formation specialist such as FastLane to help determine how the ES laws affect your business and long-term plans.