If you wish to establish a business in the Cayman Islands, you are required to engage a local licensed service provider to incorporate your company.
The incorporation and registration of a businesses is a seamless process conducted by a licensed local corporate service provider. If you wish to incorporate or register a legal entity in the Cayman Islands that will conduct business outside of the Cayman Islands, you are required to engage a local licensed service provider to incorporate your company. This is a seamless process and most firms also provide additional services such as: registered office, corporate administration, directors and other officers and management of the company on the instruction of the beneficial owner(s).
The Cayman Islands is a strong partner in combatting global financial crime. The jurisdiction has implemented the highest global standards for transparency and cross-border co-operation which are regularly reviewedand enhanced.
The legal definition of a beneficial owner in the Cayman Islands is a person who holds, directly or indirectly, more than 25 percent of the shares or voting rights in a company; or has the right to appoint or remove a majority of the board of directors of the company. However, if no individual in the company meets these conditions, the beneficial owner is the person who (directly or indirectly) has significant influence or control over the company, through either direct or indirect ownership. This does not apply if such control is solely in the capacity of a manager, director, or adviser.
Local legislation requires all persons who are beneficial owners for businesses registered and operating in the Cayman Islands to file their beneficial ownership information with the Cayman Islands Government. Once filed, the information will be stored on the Government’s air-gapped centralised beneficial ownership platform. By storing it centrally, Government will be able to more quickly provide it, through appropriate legal mechanisms, to international law enforcement, tax and regulatory authorities.
The filing of beneficial ownership information can be done either through local licensed service providers or directly with Government, depending on the type of company being used. Entities that conduct business primarily outside of the Cayman Islands, such as exempted companies, are required to engage a service provider; and the service provider is required to submit beneficial ownership information to the Cayman Islands Government in line with the requirements set out in the Companies Law (2018 Revision) and regulations thereunder. These service providers are given secure and specified access to the platform to complete their filings. They cannot view any information aside from what they enter on behalf of their clients.
Entities that conduct business primarily within the Cayman Islands, namely ordinary resident company, can complete their filings directly using the Registrar of Companies’ Cayman Business Portal (www.cbp.ky).
Whether they are made through service providers or directly, submissions must include various details on the beneficial owners of companies, namely:
- their full legal name;
- residential address, and if different, an address for service of notice;
- date of birth;
- identifying information from their valid passport, driver’s licence, or other government-issued document including the ID number, country of issue, date of issue and expiration; and
- the date the person became, or ceased to be, a beneficial owner of the company.
For assistance, the Registrar of Companies may be contacted on (345) 946 7922. Their offices are located on the ground floor of the Government Administration Building, 133 Elgin Avenue in George Town, Grand Cayman. Appointments are preferred and they can be made by phone or by emailing: firstname.lastname@example.org
Please note, the UK Sanctions and Anti-Money Laundering Act (2018) requires the UK Government to draft an order by the end of 2020 requiring British Overseas Territories to create a publicly accessible beneficial ownership register. The UK Government has indicated that such an order, if implemented, would require the British Overseas Territories to introduce a public beneficial ownership register by the end of 2023. The Cayman Islands Government has been clear that it will not consider the introduction of a public register of beneficial ownership unless and until that becomes the accepted and implemented international standard.
The application process to register your company is straight forward and your local licensed service provider will do the following:
- Contact the Registrar of Companies and ask if the company name you want is available
- Prepare the following documents (but other documents may be required based on the type of company you are incorporating):
- a) Memorandum of Association; b) Articles of Association.
The Registrar does not require details of the proposed business as the Companies Registry does not maintain information on business nature, only type as classified in the Companies Law (such as resident, non-resident, or exempted companies).
The fees for incorporation vary depending on the type of company and share capital. For a typical resident company with a share capital of less than CI$42,000, the fee is CI$300 and for an exempt company, the minimum fee would be CI$600. Your local service provider will have their own fee list. The company is deemed incorporated on the day the incorporation documents and fees are submitted to the Registrar, provided that the incorporation documentation is in good order. The processing time is approximately three to four business days, unless submitted on an express basis (an additional fee of CI$400 applies to express processing) in which case, the application will be processed within 24 hours during business days.
Company Registry Fees
The registration and annual fees for any company are dependent on the size of the authorised share capital. Also worth noting is that annual fees and annual returns are due in January of each year, but the Companies Registry is under no obligation to notify the company that the fees are due.
If these fees are not paid by the 31st March (of each year), they begin to accrue penalties up to 100% of the fee.
Every company is responsible for paying these annual fees and filing the returns. If it has not been paid nor filed, the company is subject to being struck off the register after being in default for one year. If the company had assets at the time it was struck off, those assets will become the property of the Government of the Cayman Islands. If you were ignorant of the fact that annual fees and returns were due, your company could be struck off without your knowledge. This is one of the benefits of using a locally licensed service provider, as they will process the annual paperwork and remind you of the amount and timing of annual fees. Their fees are a lot less than the fees you would pay to an attorney to make the necessary application to the Cayman Court for the company to be reinstated to the registry!