The process to register a branch with the Cayman Registrar of Companies is straightforward and the branch, once registered, is required to maintain a local registered agent and pay annual fees to the Cayman Islands Government to maintain its registration. A company that intends to conduct the majority of their business outside of the Cayman Islands would register as an exempted company.
The Cayman Islands is a popular jurisdiction for the establishment of business vehicles because of its stable legal system, modern and flexible corporate structures, business friendly culture and tax neutral status. The main forms of business vehicle established in the Cayman Islands are: exempted companies, limited liability companies, exempted limited partnerships, segregated portfolio companies, special economic zone companies and local ordinary companies. As of Q4 2021, the Cayman Islands General Registry had a total of 116,996 active companies registered and a total of 37,075 active partnerships were registered as of 2021.
Company incorporations remain a thriving part of Cayman’s financial services offering. Cayman Islands companies are used for a variety of purposes and are governed by the Companies Act (as amended). Ordinary companies are typically incorporated by those wishing to undertake business in the Cayman Islands and exempted companies are incorporated to undertake business external to the Cayman Islands. The introduction of the Cayman Islands limited liability company in 2017 added a further option for people wishing to establish a corporate entity in the Cayman Islands, combining the flexible features of an exempted limited partnership but with the benefit of the separate legal personality of the exempted company.
Another popular business vehicle is the Cayman Islands exempted limited partnership which is the vehicle of choice for certain types of international business, in particular, for closed-ended alternative investment funds. Exempted limited partnerships are governed by the Exempted Limited Partnership Act (as amended), which provides a modern, flexible framework for the establishment and ongoing operation of this type of business vehicle.
The Cayman Islands is a pre-eminent jurisdiction for the formation of alternative investment funds and, with the exception of certain exempted vehicles and structures, alternative investment funds are generally regulated by the Cayman Islands Monetary Authority. Open-ended alternative investment funds (for example, hedge funds) are regulated under the Mutual Funds Act (as amended) and closed-ended alternative investment vehicles (for example, private equity funds) are regulated under the Private Funds Act (as amended). There are over 12,000 regulated open-ended investment funds in the Cayman Islands and over 15,000 registered closed-ended investment funds.
In recent years there have been significant developments in Cayman Islands regulation as it applies to business vehicles, in particular, with respect to anti-money laundering, beneficial ownership, economic substance, data protection and the regulation of closed-ended private investment funds. These developments are ongoing and underpin the jurisdiction’s commitment to adherence to the very highest international standards.
In addition to the law firms, who are available to provide specialist legal advice and assistance in relation to the establishment and ongoing management of the various different Cayman Islands business entities, there are also many highly qualified professional firms licensed to provide corporate services in the Cayman Islands. The corporate services providers are able to provide services including: registered offices, principal offices, fiduciary services, regulatory and compliance services, the provision of nominee shareholders, as well as the maintenance of corporate records, accounts and financial statements.