How to Incorporate, Licence and Register a Business in the Cayman Islands

A complete guide to the processes involved in incorporating, licensing and registering businesses in the Cayman Islands, for local Caymanian owners, expatriate owners or overseas investors

By Daniel Altneu
Senior Associate | Bedell Cristin

Why do businesses relocate to the Cayman Islands?

People and businesses choose to relocate to the Cayman Islands for many reasons – quality of life, its excellence as an international financial centre, outstanding professional service providers, and Cayman’s innovative approaches to supporting and growing new and existing businesses.

Whilst it is important to take applicable onshore advice as to any possible tax implications, there are several reasons why Cayman is an attractive place to do business. These include:

  • Ease and speed of incorporation
  • Well-developed Companies Law based on English law, but with greater flexibility and less red tape than under the equivalent UK legislation
  • No taxation in the Cayman Islands on income or gains and, indeed, no direct taxation at all
  • No exchange controls
  • Sophisticated professional infrastructure including world-renowned banks, trust companies, law firms, accountancy firms, company management firms, and IT service providers
  • Stable political regime due to a democratically elected local government and status as a British Overseas Territory

Work with a lawyer

Consulting a Cayman Islands-based lawyer is important when establishing a business presence here to ensure due process is followed.

The requirements for each business are different and there are an array of laws and regulations that address, inter alia: Trade and Business Licences; Local Companies (Control) Law Licences; Business Staffing Plans; Work Permits; Residency Certificates; Labour; Pensions; Economic Substance; and Beneficial Ownership.

Incorporation and licensing, and registering a business in the Cayman Islands

When incorporating and registering companies in the Cayman Islands, a distinction is made between ordinary resident companies which carry on business within the Islands (often referred to as “Local Companies”) and exempted companies, which mainly carry on business outside the jurisdiction.

Subject to a few exceptions, local companies may carry on business in the Cayman Islands subject to being granted a Trade & Business Licence (“T&B Licence”). Where there is foreign ownership and control, the provisions of The Local Companies (Control) Law (2019 Revision) (“LCCL”) may be applicable unless at least 60% of the shares are beneficially owned by Caymanians and at least 60% of the directors are Caymanian. If not, Local Companies must also apply for and obtain an LCCL Licence.

Depending on the type of business, applicants may need to submit a variety of other licence and registration applications to the requisite boards in areas such as healthcare; tourism; music and dancing; and liquor.

What are the licensing requirements for Cayman Islands real estate owners?

Pursuant to the Trade & Business Licensing Directions 2016, a trade and business (T&B) licence is not required in respect of the owner or beneficial owner of more than two units of property (not including their own residence) who wishes to enter into rental or lease arrangements in respect of those units of property.

Whether the owner is Caymanian or non-Caymanian, and whether the properties are held personally or through a company, a T&B Licence is required once the owner or beneficial owner exceeds that permitted limit.

For non-Caymanian owners or beneficial owners exceeding the permitted limit, an LCCL Licence will also be required, regardless of who manages the properties.

What are the application requirements for incorporating and licensing a company?

Applications for both T&B and LCCL Licences are submitted to the Trade & Business Licensing Board (“Board”), together with various forms and due diligence documentation relating to the company and its individual directors and shareholders (Note: documents differ depending on an individual’s immigration status and existing connection to the Islands).

When applying for an LCCL Licence, the process is more complex and requires a tailored approach as there are a series of criteria prescribed by the LCCL that the Board must consider when determining an application. Additionally, both approvals of LCCL Licences and requests to waive certain prerequisites are at the discretion of the Board and Cabinet.

For further information on how to incorporate, licence, and register a company in the Cayman Islands, please contact:

Daniel Altneu

Daniel Altneu, Senior Associate | [email protected] І +1.345.949.0488

About the author
Daniel Altneu is a Senior Associate within the International Private Client team at Bedell Cristin. He offers a full private client service covering every aspect of immigration, residency, trusts and wealth structuring, estate planning, probate and family law. He advises high-net-worth individuals and companies on a variety of immigration issues and has extensive experience of assisting persons of independent means, families and businesses with relocation to the Cayman Islands.

The information contained in this memorandum is necessarily brief and general in nature and does not constitute legal or taxation advice.  Appropriate legal or other professional advice should be sought for any specific matter.


 

How to establish a banking and securities account for your corporate entity in the Cayman Islands

By Dan L. Peterson
Senior Advisor & Portfolio Manager | Private Wealth Management & Investment Advice

CIBC FirstCaribbean

Banks that operate in the Cayman Islands are required to comply with mandatory due diligence and anti-money laundering (AML) regulations that are governed under Cayman Islands law.

It is important to note that when opening an account you will be expected to provide full details on the nature of your business, including how funds will flow in and out of the account, to whom these payments will be made and received from, and what these payments will represent. This information is normally provided in your account opening paperwork.

Your anticipated transactions and expected volumes of activity should be supported with any brochures, financial statements, company structure charts, business plans, contracts, agreements, and/or invoices.

In the Cayman Islands, several forms of documentation must be presented to establish a banking and securities account for your corporate entity. The required documentation is outlined below:

Required Company Documentation

“Original certified copies” of the following company documents are required:

  • Certificate of Incorporation and any Certificate of Change of Name (if applicable)
  • Certificate of Good Standing (if established over 12 months ago)
  • Memorandum and Articles of Association
  • Register of Directors and Officers
  • Register of Members and Shareholders
  • Personal documentation for all authorised signatories
  • Personal documentation for a minimum of two directors
  • Personal documentation for all voting/management shareholders with holdings of 10% or more.

Connected Entities
Any connected entities listed as directors or shareholders (10% or more) of the entity establishing account will be required to provide original certified copies of the company documentation listed above (or local equivalent) along with original certified copies of personal documentation for a minimum of two directors and all voting/management shareholders with holdings of 10% or more.

Personal Documentation

  • Certified copies of two forms of identification; passport plus either driver’s license or national ID card
  • Certified copy of one form of residential address confirmation; utility bill, bank statement, credit card statement. Note: Bills/statements should be no more than three months old.
  • Bank reference addressed to the bank confirming the full name, date of birth, residential address, length of relationship and conduct of account. References should confirm a relationship of at least two years and can be faxed or emailed initially; however, the original must also be sent by mail (sample attached). Please ask the reference provider to include their email address.
  • Professional reference addressed to the bank confirming the full name and length of relationship. References can be faxed or emailed to us initially, however the original must also be sent by mail.

Note: If the identification and address verification documents are being certified outside of the Cayman Islands then the person performing the certification must also complete an Identity Verification Form.

Suitable Certifiers: Notary Public; Member of Judiciary; Foreign Embassy Consular; Senior Civil Servant; Lawyer; Banker; Accountant and authorised signatory of CIMA licensed service provider.

For further information, please contact:

Dan L. Peterson

Dan L. Peterson, Senior Advisor & Portfolio Manager | [email protected] | +1.345.815.2329

About the author
Dan L. Peterson is a Senior Advisor & Portfolio Manager for CIBC FirstCaribbean International Bank, with responsibility for providing investment advice to ultra-high net worth individuals located in the Cayman Islands, Bermuda and the Anglo Caribbean.