Offshore company formation has grown in importance in the business world during recent times. This is because offshore company formation often allows business owners to save tax money. This makes it appealing to investors. One of the territories which is a popular location in which offshore companies are set up is the Cayman Islands. There are various reasons why this is the case.
Reasons to choose the Cayman Islands
The Cayman Islands is a well-known tax haven for business. It is comprised of the islands of Little Cayman, Cayman Brac, and Grand Cayman. It is located in the Western Caribbean Zone, south of Cuba and northwest of Jamaica. Although it has a very small population of less than 70,000 people, the islands have one of the largest GDPs per capita in the world, ranking 11th in this statistic. The Cayman Islands is a British Overseas Territory.
The government of the Cayman Islands does not charge any direct taxes. This means that taxes such as income tax, capital gains tax, inheritance tax, and the like do not exist there. Thus, the Cayman Islands is today regarded as one of the world’s leading tax havens.
It should be noted that the use of tax havens is not the only way to reduce one’s tax burden. This is where we at Paul Hype Page & Co come in. Our tax experts can help you discover the best and most convenient ways for you to reduce the amount of tax you must pay while remaining within legal boundaries.
Requirements of Forming a Company
The Cayman Islands is one of the most respected tax-neutral jurisdictions. Since the territory is run by the United Kingdom, the general laws that cover the business environment are generally similar to British business laws. There are plenty of highly qualified lawyers, tax consultants, and agencies from all over the world who work in the Cayman Islands and offer different related services there. When opening and starting an offshore company in the Cayman Islands, one is required to fulfill several requirements.
These requirements are very simple and if one can fulfill them, one will receive a license.
The name of at least one director: The director can either be an individual or can be a corporate entity.
The name of at least one shareholder: Just like the director, a shareholder can either be an individual or a corporate entity. The director can also serve as a shareholder.
Company secretary: The company secretary is in charge of handling the legal affairs of the company.
Minimum share capital: The minimum share capital of an offshore company to be established in Cayman Islands is US$50,000. To register a company, the name of the company must be submitted and include certain words, such as “limited” or “incorporated”. For further information, one can refer to the Cayman Islands company registry online.
Once this information has been submitted, the company will be fully registered within five to six days.
In declaring profits, the company is not legally required to submit its financial accounts such as the profit and loss account, balance sheet, or cash flow statement. The company is only required to declare its profits. The Cayman Islands also has high levels of privacy and secrecy. This means that even though one is required to submit the name of the shareholder and the director to the Registrar of Companies, this information is not available to the public.
Types of Companies that Can Be Formed in the Cayman Islands
A non–resident company is legally barred from conducting any business within the jurisdiction of the Cayman Islands. A company applying for the status of a non–resident company must prove that the company will not engage in business within the jurisdiction. This will cause the state’s financial secretary to grant the certificates of non–resident, which will in turn cause the company to be relieved of some of the licensing requirements that deal with the local companies‘ control. However, the law demands that although one shareholder’s meeting must be held in the Cayman Islands, a proxy may be appointed. This law allows only non–residents of the Cayman Islands to operate such a company. Once this is done, the company will not do business with any person or any business inside the Cayman Islands.
The other category of offshore companies that can operate in the Cayman Islands is that of exempted companies. An exempted company has the following features:
Does not need to have one annual meeting in the Cayman Islands
Required to hold one director meeting every year in Cayman Islands; however, companies often use proxies
Does not need to have the word “limited” in its name
Does not need to maintain a list of annual shareholders
No matter where in the world you would like to start a company, Paul Hype Page & Co is able and willing to help you with such a task. Our team of company incorporation specialists will do all they can to ensure that the process of incorporation proceeds as smoothly as possible.