Exempt Tax Companies: Cayman Islands

The Cayman Islands are a British colony located in the Caribbean sea, about 500 miles South of Miami, Florida.

Cayman Islands Exempt Companies

The Islands enjoy legal, accounting and banking services and derive political stability by virtue of their connection with the U.K. The legal system is British and the government is leadered by a Governor appointed by the Crown who presides over a Government made up of twelve locally elected members and three senior civil servants who hold ex-officio office.

There is no exchange control and no restrictions on the movement of funds to or from the Islands.

The Confidential Relationships (Preservations) Law 1976 makes it a criminal offence for any person to divulge confidential information to a third party and the Cayman Islands have no double taxation treaty with any other part of the world but have undertaken to assist foreign governments by giving them information where a Cayman Island Company has been used or involved in activities which are mutually considered as criminal. Tax offences would not be covered by this treaty, so no information would be revealed where allegations of tax offences are made.

The Companies (Amendment) Custody of Bearer Shares Law 2001 provides for a licensed Custodian in the Cayman Islands to hold bearer shares to the order of the beneficial owner.

A Cayman Island exempt company has the following characteristics:

• There are no taxes in the Cayman Islands on income, capital gains, profits, dividends, investments or capital transfers.
• The company receives a twenty year guarantee against taxation from the Cayman Islands Government, which may be extended to thirty years on application.
• Shareholders
  Only one shareholder is required whose details are not maintained on public record.  Bearer or registered shares are permitted.  However, bearer shares must be deposited with a licensed authorised Custodian in the Cayman Islands to be held to the order of the beneficial owner.
• Directors
  Only one director is required whose details must be advised to the company registrar but this information is not available for public inspection.  Directors do not have to be resident in the Cayman Islands but one statutory meeting of the directors must be held within the islands every year.  This may be done more conveniently by the appointment of proxies.  Corporate directors are officially recognized.
• Annual Reporting
  There is no requirement to file accounts with the registrar. However, an  annual  return  must  be  filed.   The  return  takes  the  form  of  a  simple declaration.
• Restrictions on name and activity
  Exempt companies have no restrictions on names.
• Local Requirements
  As a matter of local company law the company must maintain a registered office address within the Cayman.
• Secrecy
  The Confidential Relationship (Preservation) Law 1976 makes it a criminial offense to divulge confidendtial information or to willfully obtain or attempt to obtain confidential information relating to a Cayman Island company. The Law imposes a maximum penalty of a fine of CI$5,000 and/or a term of imprisonment of up to 2 years.

.

Remark:

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, this information does not constitute legal or other professional advice.