The differences in, and suitability of, various types of business structure are highly technical and are best discussed with a qualified Cayman Islands attorney. Typically, small owner-operated businesses with few liabilities, might consider operating as a sole trader (often using a ‘trading as’ title such as Fred Smith (t.a. Fred’s Fantastic Fences). There are few formalities for formation and few annual fees.
However, the sole trader is personally responsible for any debts the business incurs. Due to immigration requirements and the rules governing the grant of a T&B Licence, in practise, only a Caymanian will be able to operate a business as a sole trader if they are competing in the domestic market.
A sole trader is able to start his/her business without any formalities by simply offering services or goods in return for payment. The sole trader can employ people to work in the business, but is personally responsible for all the liabilities of the business (e.g. rent, T&B Licence fees, salaries and benefits of employees) and is also the person who receives all the profits.
As indicated above, however, a foreign national competing only in the international economy from a base within the Cayman Islands, will generally only be able to obtain a licence and operate in and from within the Cayman Islands if they first incorporate a suitable Cayman Islands company and obtain suitable licensing for that entity. There will be no requirement for such an entity to have any Caymanian participation.