6 Key Factors to Consider Before Registering a Company in Cayman

In a world where a cup of coffee you drink in a restaurant is taxed, imagine establishing a business wherein you don’t have to pay any tax ( well, mostly)!

There is no corporate income tax, capital gains tax, inheritance tax, or value-added tax (VAT). There are taxes and fees that you have to pay, which we will discuss later in the blog.

Some of you already know which place we’re talking about. To those who don’t, these archipelago islands are set in the Caribbean, a British overseas territory called the Cayman Islands!

Beach haven, a melting pot of cultures, an ever-growing financial hub, an extraordinary quality of life, blessed cuisine, and the list is endless.

Before we dive further into the blog topic, let us tell you that company formation in the Cayman Islands is relatively straightforward and streamlined. Taking the help of a professional here could accelerate the process.

Here is the outline of the process of registering the company in Cayman -

1. Selecting a company name
2. Preparing and filing the memorandum and articles of association
3. appointing directors and registering with the Cayman Islands Government

However, it’s important to note that certain industries, such as banking and insurance, may have additional regulations and requirements.

The Cayman Islands Company Registry

The Cayman Islands company registry has played a great role in expanding the horizons of the Islands and making it a successful and most sought-after place for entrepreneurs, investors, etc, worldwide.

This government body is responsible for

• Maintaining a database of companies, their directors, and shareholders
• Ensuring that companies meet their legal obligations.

Each type of Cayman Islands company has its own set of regulations and requirements, whether it is an exempted company, an ordinary resident company, or a segregated portfolio company.

The registration and control of companies are governed by

• The Companies Law
• The Limited Liability Companies Law
• The Foundation Companies Law

Now, let’s get into the topic!

7 Key Factors to Consider Before Registering a Cayman Islands Company

1. Purpose of the business

Of course, defining the purpose of your business goes without saying, but you have to decide whether the Cayman Islands is a perfect jurisdiction for your company.

2. Tax Rules

As mentioned above regarding taxation, the Cayman Islands has a low tax regime, but there are specific requirements and regulations regarding the taxation of companies operating in the jurisdiction.

Some of the taxes and fees are as follows:

• Annual fees: A must-pay fee to the Cayman Islands government to continue the operations.
• Stamp duty: 0.5% applies to the values of all real estate transactions.
• Work permit fees: This is payable when you employ people in Cayman. This has to be paid for each employee.
• Business license fees: Businesses, such as restaurants and retail stores, may be required to pay business license fees.

3. Regulation Policy

Another important factor to consider is Cayman’s regulatory environment. You must check whether your business activities will be subject to specific laws or regulations.

4. Company structure

For example, whether you want your company to be a limited liability company or an exempt company. Choose based on your business needs.

5. Professional services

If you are new in the Cayman Islands, you should always consider consulting business advisors, professionals, and lawyers who can assist you with the company formation process.

6. Costs & Expenses

Thoroughly study the cost of forming a company in Cayman, including professional services and ongoing expenses such as annual fees and taxes.

7. Reputation & Access to Global Markets

Since Cayman holds a reputation as an offshore financial center, it is crucial to weigh the effect it will have on your business.

Additionally, assess if the Islands can provide you access to the important markets and whether it has the infrastructure to suit your business needs.

Conclusion

Establishing a business is a huge responsibility. Your business will become the bread and butter for everyone associated with it. Each step should be taken with the right action plan.

Make the above tips your checklist and you’re all set!