Cayman Islands Company Formation 2025

Setting up a company in the Cayman Islands, due to its favorable tax regime, confidentiality, and a relatively easy and fast incorporation procedure, is attractive to many entrepreneurs and investors. Herein, a detailed overview of the process of setting up a company in the Cayman Islands is carried out. The first step for company formation in the Cayman Islands is to choose the type of company.

First and foremost, you have to decide what type of company best serves your interests. There are several types of companies that may be incorporated in the Cayman Islands:

• Exempted Company: The most popular choice amongst foreign investors, as such type of company is allowed to conduct business outside the islands and is entitled to exemption from taxation in the Caymans for up to 20 years.
• Segregated Portfolio Company (SPC): This business structure will be a great choice if you need to manage risks, allowing separating assets and liabilities into segregated portfolios.
• Limited Partnership: This type of business is quite popular for investment funds.

Company name

You have to decide on a very specific name, completely different from the ones already registered in the Cayman Islands. It should show the type of your company, such as Ltd. for limited liability.

Preparation and submission of documents

The following documents will need to be prepared and filed with the Cayman Islands Registry Office in order to incorporate a company:

• Memorandum of Association.
• Articles of Association.
• Declaration of compliance with legal requirements.
• Proof of payment of state duty.

Registered office and agent

Each Cayman Islands company is obliged to have a registered office in the Islands, as well as a registered agent, who shall represent the company on legal and official matters.

Bank account

A corporate bank account will be required to undertake business. While this can be cumbersome because of KYC and anti-money laundering requirements, having a local financial advisor would make this easier.

Compliance with regulatory requirements

On incorporation, a company is required to be compliant with any local legal and regulatory requirements, including the preparation and filing of annual reports and reviews of KYC and AML policies.

Setting up a company in the Cayman Islands may prove very advantageous in many respects, such as tax benefits and privacy. The Cayman Islands have a special tax regime—a structural reason why this offshore center is so popular among international investors and companies.

Table showing the main aspects of taxation in the Cayman Islands

This regime stipulates no direct taxes for companies and individuals; hence, the Cayman Islands are considered one of the most attractive places for international business. It should be underlined that with regard to the lack of direct taxes, companies may also be obliged to pay different registration and licence fees, as well as annual government fees for maintaining their status.

It is also critical to note that while the Cayman Islands do not charge taxes from companies and individuals, this should be reaffirmed in that it does not absolve persons liable to pay taxes in other jurisdictions from paying their taxes in conformity with laws of those countries where they are tax residents.

Types of companies exist in the Cayman Islands

Dependent on the specifics of the particular business and its purpose, there are several main types of legal entities that can be registered in the Cayman Islands. Herein, the main types of companies include:

Each of them has different characteristics and various requirements for registration; their benefits to business and investor are also not alike. The most suitable form of legal entity for your undertaking depends upon the specific goals and needs of your business.

What is the amount of the authorized capital of the company in the Cayman Islands?

In the Cayman Islands, there is no rigid minimum authorized capital requirement for incorporation. This would mean that, depending on the structure chosen for the company and its corporate objectives, the authorized capital can be set at a very low level, down to a token amount.

However, when registering a company, the size of share capital has to be considered because it may affect the amount of the state fee payable upon its registration and for the annual renewal of the license. The amount of the above fee is determined by the size of the authorized capital of the company but also depends on the type of company. Such is the case with fees for Exempted Companies, one of the most popular kinds of business on the Cayman Islands, where the state duty is estimated based on the sum of the authorized capital.

It is, therefore, important to note that even though Cayman law does not determine the minimum amount of share capital, such an amount of share capital must be given serious consideration with a view to optimising the cost of government fees, as well as meeting the corporate objectives of the company. Anyway, it is worth consulting with the lawyers or accountants of Regulated United Europe as to determining the best amount of share capital in conformity with your specific business needs.

Must a Cayman Islands company have a local director?

The Cayman Islands companies are under no obligation to secure locally resident directorship. Companies registered in the Cayman Islands may have directors of any nationality and residing in any jurisdiction. This is one of the key reasons why the Cayman Islands have become a very popular domicile for international business, offering flexibility in management and a chance to realize the international experience of a management team.

However, regarding compliance with the requirement of local legislation and regulations, all companies in the Cayman Islands are obliged to maintain a registered office in the Islands and a registered agent accredited by the Cayman Islands as being qualified to provide such services. This would also bring about a registered office where official correspondence would be received and assists in the fulfillment of local legal requirements.

It is to be noted, however, that while no appointment of a local director is required, the structure in composition of the board has to be highly considered by companies to make sure that effective governance will be delivered, and also to ensure observance of corporate governance and international standards of transparency. In certain instances, it would be relevant to include professionals on the board who bring both international experience and local regulatory knowledge, in respect of the nature and structure of the business conducted by the company.

What are government fees to form a company in the Cayman Islands?

Government fees in the Cayman Islands may vary depending on the company type, but also on additional factors, such as the amount of authorized capital. The fee structure covers various aspects related to the incorporation and maintenance of the company in this jurisdiction. Please note that all fee-related information is subject to change; therefore, we invite you to contact our registration agent or tax advisor for the most recent information.

Some of the main charges that may be payable upon incorporation:

Registration fee

The registration fee is different with regard to the type of company and the amount of its authorized capital. For example, for Exempted Companies, which are one of the most popular types of companies for foreign investors, the registration fee can start from several hundred to several thousand US dollars depending on the type of company.

Annual fee

Once the company is already registered, annually, an annual license renewal fee is payable. Again, the amount is determined by the type of company involved and the size of share capital. Annual fees can be similar to the initial registration fees and are used to keep the company active.

Additional fees

Other charges may be for registration-related services: filing fees of certain documents, registered agent, and registered office fees, or for additional licenses or permits, if such are required for some special type of business.

Please note that exact amounts and fee structure are subject to change; it is recommended that you get in touch with our professional registration agent specialising in Cayman Islands corporate law for the latest and most relevant information prior to commencing the process of setting up a company in the Cayman Islands.

What is the annual cost of maintaining a company in the Cayman Islands?

The cost of maintaining a company annually in the Cayman Islands depends upon several factors such as type of company, amount of share capital, and whether additional services are required, including registered agent, registered office, management, and other professional services. The following is typically included in the annual maintenance cost for a company:

The annual cost to keep a company in the Cayman Islands may begin at about US$3,000-5,000 for small companies with very limited operations. For larger companies or those needing an extensive range of professional services, the costs are substantially higher. For the best estimate specific to your needs, kindly contact a professional Cayman Islands incorporation agent or law firm.

What are the main advantages of incorporating a company in the Cayman Islands?

The substantial advantage of establishing a company in the Cayman Islands makes this jurisdiction very appealing to an international investor, financial institution, and company. Following are some of the key advantages:

No direct taxes

The Cayman Islands do not charge any direct taxes for companies and persons. In other words, no corporate tax, income tax, capital gains tax, dividend tax, or personal income tax is charged.

International recognition and creditworthiness

The Cayman Islands are a respected, acknowledged jurisdiction with huge trust and a level of reliability given in business. This will enhance the relations with banks, investors, and partners.

Flexibility of corporate governance

Substantial flexibility is provided by Cayman Islands law in the structure and governance of a company, which includes no minimum share capital requirements, the ability to use directors of any nationality and residence.

Confidentiality

The Cayman Islands maintain a high level of privacy for company owners and directors. Although access to some information upon company registration is obtainable, it is not always available to the public.

Laxity in currency control

Exchange controls do not exist in the Cayman Islands; thus, free flows of capital are ensured and cross-border transactions are permitted.

Stability and safety

A politically stable, economically stable territory, with highly developed legal protection, turns the Cayman Islands into a reliable structure for doing international business.

Convenience for international funds and investments

The favorable regulatory regime has been one of the key reasons the Cayman Islands have become the most desirable and popular jurisdictions for setting up investment funds, such as hedge funds or private equity funds.

Setting up a company in the Cayman Islands provides a combination of tax advantages, international recognition, management flexibility, and privacy that is hard to match in other jurisdictions for most types of businesses and investments. It is, therefore, advisable to consider all the needs of your business or investment and consult with the legal and international tax experts at Regulated United Europe for optimum structuring and management of your company.

How to set up a company in the Cayman Islands?

Establishment of a company in the Cayman Islands requires a series of steps, and there are different ways to do it depending on a concrete business need and a legal form of company chosen. The main ways of setting up a company in the Cayman Islands are as follows:

How you would like to incorporate depends on many factors, but certainly depends on specific business objectives, need for confidentiality, budget, and timing. It is strongly recommended that a consultation with professionals specialising in corporate law and tax planning in the Cayman Islands be conducted to make sure your company complies with local legal and regulatory requirements.

Does your company have to have a registered office in the Cayman Islands?

Yes, every company incorporated in the Cayman Islands is required to have a registered office in the Islands. It acts as an address where correspondence is received, for services of process for notices, and where certain documents must be maintained.

It has to be an actual physical address within the Cayman Islands, not merely a post office box. Generally speaking, a registered address is provided by a registered agent, who would act as an individual local representative of the company and may provide additional services that are of relevance in managing the company or associated administrative support.

Having a registered address is one of the prerequisites to support observance of local legislation and, therefore, to keep the company active and legal in the Cayman Islands. This address will also guarantee more transparency and accessibility for any government authority or stakeholder in case official communication with the company should be necessary.

Can I open a branch office of a foreign company in the Cayman Islands?

Yes, a foreign company can establish a branch in the Cayman Islands. A foreign company is, therefore, allowed to carry on its business in the Cayman Islands, under the law locally, but without losing the legal form and entity of the original company.

For the branch office registration of a foreign company in the Cayman Islands, the following activities shall be pursued:

Preparation and submission of documents

The required documents are to be prepared and submitted to the Registry Office in the Cayman Islands. The documents usually include:

• Certificate of Incorporation or any other document to prove registration of the company in the country of origin;
• Constituent documents of a foreign company.
• Decision on the intention to open a branch in the Cayman Islands.
• If required by law, there should be an appointment of a local authorized representative or agent.

Registered address

The branch needs to be registered in the Cayman Islands, having an official address for correspondence and notices.

Registration fees

Registration fees are paid on filing the documents, and their size may depend on the specifics and scale of the branch’s activities.

Compliance with legislation

This branch shall be subject to local laws with respect to its operation in the islands on all matters related to accounting, tax reporting, licensing requirements, and others to the extent applicable.

A branch office opened within the Cayman Islands for a foreign company can offer advantages such as expanding business into new markets and taking advantage of the favourable tax regime in respect of certain activities. However, it is important that all requirements and regulations are carefully considered to ensure full compliance with local law.

Is a foreigner allowed to open companies in the Cayman Islands?

Yes, a foreigner can open a company in the Cayman Islands. This jurisdiction has been quite appealing to international investors and entrepreneurs by having an enabling tax regime with no direct taxes on companies and income of individuals, while at the same time offering a high level of confidentiality and asset protection.

Strong steps to be taken by foreign persons for opening up a company in the Cayman Islands are given below:

1. Company Type Selection: Determine the type of company your business best suits, such as an Exempted Company or Limited
2. Company Name: You have to provide a unique name for your company, which is not identical to any existing company names in the Cayman Islands.
3. Preparation and filing: The relevant constituent documents, such as memorandum and articles of association, have to be prepared and filed with the Cayman Islands Registration Chamber.
4. Registered office and agent: Every Cayman Islands company is obliged to have a registered office in the Islands and to appoint a registered agent, which is usually provided through a law firm or consultancy firm specialising in corporate clients.
5. Government fee payment: Once the documents are filed, the relevant government fees for company registration need to be paid.
6. Regulatory compliance: Depending on the scope of its business, companies may need to comply with different requirements of regulation, including obtaining necessary licenses.

The process of incorporation is often assisted for foreigners by lawyers or international tax experts from Regulated United Europe in the Cayman Islands who will further be able to confirm compliance with local legal requirements. In such cases, the firms can provide additional services of representation, preparation and filing of documents, providing a registered office and registered agent.

Can I apply for a residence permit by incorporating a company in the Cayman Islands?

Setting up an organization does not, as such, create a right to residence in the Cayman Islands. The usual requirements for residence in the Cayman Islands are closely linked to investment in property, creation of jobs for local residents, or other economic contributions to the island economy. There are different programmes and categories of residence permits applying to investors, entrepreneurs, and highly skilled professionals.

 

Residence permits for investors and entrepreneurs

• Residence permit with the right to work: Individual investors who are willing to invest in the Cayman Islands economy can apply for a residence permit which allows them to be employed within the company set up.
• Residency for persons of independent means: This category caters to residence permit for those individuals who have adequate annual income without having to work in the Cayman Islands.
• Direct Investment Certificate: This enables the applicant to apply for immediate permanent residence in return for the investors’ serious investment in the economy of the islands, such as establishing or buying a company that creates new jobs for the residents locally.
• Application Process: The documentation and submission, proof of financial stability, a business plan (if applicable), and a medical and police record check are included in the application process for a residence permit. The requirements for cost and investment really vary from one programme to another.
• It’s worth noting: The rules and requirements for residency in the Cayman Islands are subject to change, and it is advisable that you seek the latest available information and advice from authoritative sources or appropriately qualified legal practitioners specialising in immigration law of the Cayman Islands.

What does the memorandum and articles of association of a company incorporated in the Cayman Islands contain?

The Articles of Association of the Cayman Islands company will have a certain set of essential provisions that outline the structure, governance, and rules of the company. It is considered the primary corporate document governing the internal relationships between the shareholders and directors and the company as a legal entity. On this ground, the Articles of Association, or the Statutes of incorporation as it is very commonly referred to in international practice, may provide for the following aspects:

Articles of association shall be prepared in accordance with the requirements of the law of Cayman Islands and filed to the Registry Office as a part of the company registration process. It is a very important document, which shall be drawn up with extreme caution keeping in mind all aspects of a company’s business and possible risks. Most of the companies therefore consult legal advisors and corporate law specialists for drafting their articles of association.

How long does it take to set up a company in the Cayman Islands?

The length of time it takes to incorporate a company in the Cayman Islands will depend on a number of factors, including the type of company chosen, the completeness and accuracy of the documents provided, and the efficiency of the registration agent. Generally speaking, the process can take anywhere from a few days to a few weeks.

• Arrangement of Documents: This includes preparing and gathering all the necessary documents, which may range from a few days to a few weeks depending on one’s speed in gathering all the information and documents.
• Filing and registration: Once prepared, the documents are filed at the Cayman Islands Registry Office. The actual registration can be quite speedy and for electronic filing through an agent in a few days or even less. Some agents offer an express registration option that accelerates the process.
• Chamber of Registration Documents Delivery: After registration, the Chamber of Registration issues necessary corporate documents like the Certificate of Incorporation. This, too, might take several days to a week, based on workload conditions at the chamber and the speed type selected for the procedure.

Generally speaking, if all documents are prepared correctly and there are no delays from the Registry, incorporation of a company in the Cayman Islands may take a week or two. In the meantime, one should consider potential delays during the preparation of documents or in case of questions from the registration authorities.

To this end, and for the purposes of accelerating the process of incorporation, it would be prudent to consult with a qualified Regulated United Europe agent specialising in the corporate law of the Cayman Islands who will be able to support and guide the incorporation process with least likelihood of delay.

What activities can a company engage in in the Cayman Islands?

Companies incorporated in the Cayman Islands can pursue all types of activities, provided that such activities are not prohibited by local laws and that, if required, appropriate licenses are obtained. Because of its tax-friendly environment, confidentiality, and flexible corporate structure, the Cayman Islands is attractive for all kinds of international businesses, such as the following:

Restrictions: Certain activities, such as banking, insurance, and investment fund management, are licensed by relevant regulatory authorities of the Cayman Islands. A company is also required to comply with applicable local laws concerning licensing, regulatory, and anti-money laundering requirements, among others.

When planning the operations of a company in the Cayman Islands, consideration of all relevant requirements should be carefully made, and professional advice from Regulated United Europe should be sought.

Does a Cayman Islands company have to employ anyone?

There is no requirement for any Cayman Islands-registered company to require local staff. Most companies do not, however—especially those that are being filed as Exempted Companies—use the Cayman Islands as a reason to benefit from the state’s advantages in tax efficiency and confidentiality.

Companies can be managed and controlled from anywhere in the world and many use the services of local management companies or registered agents to carry out corporate and administrative functions including compliance and the provision of a registered office.

However, when the activities of a company necessitate some sort of physical presence within the Cayman Islands—for instance, where real estate transactions or specific services are concerned—it shall have to utilize either local or foreign employees. In this regard, companies are supposed to adhere to the prevailing labour laws in respect of obtaining work permits for foreign employees when necessary.

Note that certain requirements may vary depending on the type of business and the structure of the company; further information and certification are recommended and should be obtained from legal and professional advisors in the Cayman Islands regarding specific updated information and in accordance with laws and regulations.

How to choose a name for a company in the Cayman Islands?

The process of choosing a company name within the Cayman Islands requires much attention to detail and is controlled by certain requirements and guidelines. The following are major focus areas when naming your company:

The name determined should then be sent for confirmation by a registered agent or attorney in the Cayman Islands, who confirms its propriety in all respects and arranges registration.

Cayman Islands Business Register

Business Register in the Cayman Islands, also known as the Registrar of Companies, is an official register of all corporate entities, such as companies, partnerships, foundations, etc., which have been registered in the jurisdiction. This register provides necessary transparency to the corporate world of the Cayman Islands, and also serves as a source of crucial information for investors, business partners, and regulators.

Key Features of the Business Register in the Cayman Islands

• Information Availability: The registry will maintain records of the registered entity, including the name, date of registration, status (inactive or in liquidation), among others, and the address. Specific details like those of directors and shareholders are not made available due to specific provisions of the local privacy acts.
• Online Access: The access to the Registry has been provided by the Registrar General through a dedicated website wherein the interested party can search and obtain required information relating to companies; a fee may be levied for the same in accessing certain categories of information.
• Registry Updates: The registry is updated on a day-to-day basis in respect of changes in status of the registered entities, such as a change of company name, addition of new entities, and striking off/liquidation of existing ones.
• Registered Company Status Maintenance: To maintain such status in the Cayman Islands, the concerned entities need to meet certain prerequisites, including filing accounts on an annual basis and paying the government fees applicable from time to time.
• Business Value: Being on the business register improves the legitimacy and transparency of companies operating in or through the Cayman Islands, making investors, banks, and other business partners more confident.

For more information with details and access to the registry, refer to the official resources of the Registrar General of the Cayman Islands or be assisted by Regulated United Europe.

How do I register an investment fund in the Cayman Islands?

The Cayman Islands are one of the most popular jurisdictions in which to register an investment fund, given that the regulatory environment, coupled with political stability and a lack of direct taxation, creates a particularly appealing framework. The process may vary depending on the type of fund, but generally speaking, involves the following steps:

In general, professional legal advice is strongly advisable for promoters of investment funds to ensure full compliance with all regulatory requirements, as well as to facilitate an optimal process for the registration of such funds. Legal advisors and specialized firms will support an applicant on all sides during the establishment and operation of the fund.

How do I register a hedge fund in the Cayman Islands?

Cayman Islands hedge fund registration is an increasingly popular choice for international investors and asset managers alike. Major steps in the hedge fund registration process will include the following:

1. Determining the Structure of the Fund: Selecting the proper hedge fund structure may include a limited liability company, partnership, or trust, depending on the investor’s objectives, the strategy of the fund, and preferred tax regimes.
2. Preparation of the constituent document: The next step should be the preparation and agreement of the constituent documents, the articles of association or partnership agreement of the fund, and the investor offer or prospectus. This should include explaining the terms upon which the investment is made, the governance arrangement, the fees and charges, and the investment strategies and restrictions.
3. Selection of service providers: Key service providers to be nominated and appointed would include the administrator, custodian (asset custodian), auditor, and legal counsel. All of these service providers play a very important role in ensuring efficient administration and compliance with the relevant regulations.
4. Registration of the fund with the Securities and Investments Commission (CIMA): Hedge funds must be registered with the Cayman Islands Monetary Authority. An application for registration, articles of incorporation, and other information need to be filed, and the cost for registration has to be paid. There are also categories of registration, depending on the nature of the investors and the net asset value of the fund.
5. Account opening: Bank accounts have to be opened for the fund to maintain its operations and investment activity.
6. Launch and maintain the fund: When a fund completes such a registration process and fulfills its requirements, it can subsequently begin to raise capital and conduct investment activities. Hedge fund management involves the ongoing monitoring of conformity with the investment strategy, risk management, and ensuring transparency for investors.
7. Ongoing compliance with regulatory requirements: The fund has to remain further compliant with the regulatory and operational obligations of filing annual reports with CIMA and auditing its financial statements.

In the Cayman Islands, hedge fund registration may be complex. However, advice from qualified legal and professional advisors specializing in financial services and regulation is highly recommended. These professionals will handle your hedge fund’s application process smoothly by taking care of every minute detail of the law and required regulations.