Business entities in Cayman Islands in 2023
Entrepreneurs willing to setup a business in the Cayman Islands are able to do so through a number of business entities, the most common being by far the Cayman Islands exempt company. Please find below more information on the different types of business vehicles available in the Cayman Islands.
Cayman Islands offshore company (Exempted company)
- Incorporation of a Cayman Islands exempt company requires i) a minimum of one shareholder, ii) one director (no requirements to be local) and iii) no minimum capitalization. The company must have a registered office in the Cayman Islands;
- Such entity cannot conduct business with Cayman residents and is not subjected to corporation, income, capital gains, inheritance or wealth tax, though a nominal fee of US$854 is imposed annually on the company;
- There are no requirements for appointment of auditors or filing of financial statements;
- Best uses: Such entity is usually used as a trading company or as a conduit company for investment overseas.
Cayman Islands Non-resident Company
- The non-resident company is an alternative option to the exempt company. The requirements are similar to exempt company in that it requires i) at least one shareholder, ii) one director and iii) no minimum capitalization;
- Such companies must have a registered office and maintain a register of members open to inspection. Details of members, directors and paid-up capital must also be reported to the registrar annually;
- Non-resident companies are prohibited from trading within the country and no taxes are levied on it, annual fee of US$701 is required;
- This entity may be converted to an exempt company or a resident company;
- Best uses: Such entities are useful for offshore operations and transactions.
Cayman Islands Exempted Limited Partnership (ELP)
- ELP requires a minimum of one general partner and one limited partner. The general partner must agree to all contracts concluded by the partnership and has unlimited liability while the limited partner benefits from limited liability. Partnership law requires all ELPs have a registered Cayman office and that at least one of the general partners be a resident in Cayman Islands;
- Neither the ELP nor the partners are subjected to taxation in the Cayman Islands. ELP are not permitted to conduct business inside of Cayman. Annual fee of US$1,463 is imposed on ELP;
- Best uses: Generally recommended for firms providing professional services.
Excluded Person Financial Company
- Same requirements as exempt companies;
- Securities Investment Business Law can exempt certain persons (excluded persons) who are engaged in securities investment from full licensing requirement conditional on filing an annual declaration with CIMA and an annual fee;
- Excluded persons include i) a company managing securities investment for one or more members of its group, ii) a person carrying on investment exclusively for a listed or regulated entity or iii) a person regulated in respect of securities investment by a recognized overseas regulatory authority;
- Best uses: Overseas trading companies or investment companies dealing in securities.
Comparison table between Cayman Islands business entities
Exempted company Excluded person financial company Non-resident Company Exempted limited partnership Operations and logistics Bank signatory must travel? No No No No Is doing business in Cayman permitted? No No No No Allowed to sign contracts with local clients? No No No No Allowed to invoice local clients? No No No No Can rent local office premises? Yes Yes Yes Yes Tenancy agreement required before incorporation? No No No No Allowed to import raw materials? No No No No Allowed to export goods? No No No No Accounting and tax Corporate tax payable? 0% 0% 0% 0% Corporate bank account? Deutsche Bank Butterfield Bank Cayman National Fidelity Bank Statutory audit required? No No No No Annual tax return to be submitted? No No No No Access to double taxation treaties? No No No No Company law Issued share capital required? US$1 US$1 US$1 US$1 Resident director required? No No No No Cayman shareholder/trustee/partner required? No No No Yes Minimum number of directors/managers? 1 1 1 1 Minimum number of shareholders/partners? 1 1 1 2 Individual shareholders/partners allowed? Yes Yes Yes No Corporate director(s) allowed? Yes Yes Yes Yes Public register of shareholders and directors No No Yes No Immigration Can the entity hire expatriate staff? No No No No Fees and timelines How long to set the company up? 1 week 1 week 1 week 1 week How long to open corporate bank account? 3 weeks 3 weeks 3 weeks 3 weeks Estimate of engagement costs US$19,722 US$31,472 US$16,272 US$13,270 Draft invoice View invoice PDF View invoice PDF View invoice PDF View invoice PDF