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Cayman Islands

Limited Liability Company

The Cayman Islands has an excellent legal, fiscal, financial and professional environment for the incorporation of international companies.

Cayman is a world-leading offshore financial services jurisdiction. due to its political and economic stability, and its broad offer of banking, trust, hedge fund formation and investment, structured finance and securitization, captive insurance, and international business services.

The Limited Liability Companies Law 2016, came into force on July 8th, 2016, creating a new hybrid entity with separate legal personality and limited liability of its members but with greater structure flexibility than a corporation and taxed as a partnership.

An LLC requires minimal corporate formation requirements and a fast registration procedure. It may be incorporated as a single-member LLC, and there are no company structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital. Its operating agreement may be arranged by its members according to their needs.

Members pay personal income taxes in their country of residence on LLC profits proportionally to their share of participation in the LLC company, whether distributed or not.

It is important to note that certain countries do not recognize the pass-through status of an LLC, if the LLC is deemed to be tax resident in one of such countries, it may be subject to corporate income tax.

LLC’s tax transparency allows residents of certain jurisdiction to not be penalized under controlled foreign company rules.

LLCs can conclude contracts in Cayman or exercise any of its powers in Cayman to carry out business outside the Islands, including opening and maintaining bank accounts and rental or ownership of real estate in the jurisdiction.

In the Cayman Islands, there are no direct taxes. No corporation tax, income tax, capital gains tax, inheritance tax, gift tax, nor wealth tax. Certain documents may be subject to nominal stamp duty.

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

Annual reporting filings are minimal, there is no need to file financial statements and audits are not required unless the company is regulated by the Cayman Islands Monetary Authority.

Companies incorporated in Cayman also benefit from a wide range offer of financial and professional services. There are hundreds of banks and trust companies licensed in Islands, including 47 of the 50 largest banks in the world and high-end professional services, including lawyers, accountants, insurance managers, mutual fund managers, and administrators, among others.

The Cayman Islands has implemented the OECD’s automatic exchange of information for tax purposes (AEoI) via common reporting standard (CRS).

The Cayman Islands LLC is an excellent entity for movable and immovable assets holding, asset protection, investment funds, joint venture companies, private equity transactions, securitizations and other corporate transactions and international structures.

A Cayman Islands LLC may be required to obtain a license or to register with the Cayman Islands Monetary Authority to carry out certain activities such as banking business, trust business, company management, insurance business, mutual fund administration, the business of a mutual fund and securities investment business.

On January 1st, 2019, entered into force the International Tax Co-operation (Economic Substance) Law, 2018 – requiring companies (e.g. Exempted companies, LLCs and LLPs) conducting relevant activities to satisfy substance requirements.

Relevant activities include fund management, banking, insurance, finance and leasing, distribution and service center business, headquarters business, intellectual property business, shipping, and holding company business.

This specifically affects companies carrying out financial, insurance services and investment business; corporate management services to affiliates; operating, renting or chartering ships transporting passengers, goods and mail by sea, or using, maintaining or renting containers; companies trading goods with and/or providing services to affiliate companies; companies deriving income from the exploitation of IP rights; and pure equity holding companies.

Note that investment fund vehicles are explicitly excluded from this legislation.

Companies that carry out relevant activities must satisfy the economic substance test – they must:

  • conduct its core income-generating activities in Cayman (which are defined in the law).
  • be directed and managed from within Cayman.
  • have an adequate amount of operating expenditures incurred in or from within the Islands.
  • have an adequate physical presence (including maintaining a place of business or plant, property, and equipment) in the Islands.
  • have an adequate number of full-time employees or other personnel with appropriate qualifications in the Islands.

Holding companies which only hold equity participations in other entities and only earn dividends and capital gains will be subject to a reduced economic substance test – it must have complied with all applicable filing requirements and must have adequate human resources and adequate premises in the Islands for holding and managing equity participations.

With respect to IP holding companies – companies that are exploiting IP rights and:

  • have not created such IP
  • have acquired the IP from a company of the same group structure or from a third-party that has conducted research and development out of Cayman Islands
  • and licenses the IP to a company(s) of the same group

or does not carry out research and development, branding or distribution as part of its Cayman Islands core income generating activities – are considered high-risk intellectual property businesses and may be subject to an enhanced substance requirements test.

All Cayman companies are required to notify annually the Authority – stating whether or not they are carrying out relevant activities.

Companies carrying out relevant activities are required to file a basic return related to the amount and type of income with respect to the relevant activity, expenses, assets, management, employees, and physical presence, among other requirements. Existing companies incorporated on or before December 31, 2018, will need to comply with substance requirements by June 30, 2019.

Substance requirements filings will be reviewed by the designated authority to ensure that such entities have adequate economic substance in the Islands. Companies failing the substance test will be given direction on how to meet the test and may face a fine of up to KYD 10,000.

Continued failure to meet the test in the following year may result in higher fines of up to KYD 100,000.

Taxes

Corporate income tax - Cayman Islands does not levy corporate income tax. In addition, an LLC is a tax transparent entity, which means that any profits are passed through to the members to be reported as personal income.

In addition, an LLC may apply for an undertaking from the Governor that no law enacted in Cayman imposing any tax to be levied on profits or income or gains or appreciations shall apply to the LLC or to any member in respect of the LLC. The undertaking will be for a maximum of 50 years and will also cover estate duty or inheritance tax.

Other taxes - There is no personal income tax nor capital gains nor corporation tax nor value added tax. The only existing taxes in the Cayman Islands are:

  • Stamp duty on the lease of the property from 5 to 20% of the annual average rent.
  • Stamp duty on the lease of land, 5% of the value of the property if the term is more than 30 years, or 5% of the average annual rent if less than 30 years.
  • Tourist Accommodation Tax: 10% of the income obtained by renting tourists or USD 10 per day for each room occupied in timeshare properties
  • Stamp duty on the transfer of a property of 7.50% on its value.
  • Import duty tariffs between 22% and 27%.
  • Tax transparent entity
  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 0% Offshore Income Tax Rate
  • 0% Corporate Tax Rate
  • 0% Capital Gains Tax Rate
  • 0% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 0 Losses carryback (years)
  • 0 Losses carryforward (years)
  • 0% Personal Income Tax Rate
  • 0% VAT Rate
  • 0 Tax Treaties

Country details

Cayman Islands
KYD
George Town
North America
e n - K Y
44270

The Cayman Islands is a British Overseas Territory dependent on the United Kingdom and located northwest of Jamaica between the island of Cuba and the coast of Honduras in the waters of the Caribbean Sea. The Cayman Islands is a member of the CARICOM single market.

The 264-square-kilometer (102-square-mile) territory comprises three islands, Grand Cayman, Cayman Brac and Little Cayman, where about 69,000 people live, 55,000 of which live in its capital, George Town (Grand Cayman).

Its official currency is the Cayman Islands Dollar (KYD), pegged to the US dollar at a 1,227:1 ratio.

The Cayman Islands are a British overseas territory, designated by the UN Decolonization Committee as one of the last Non-Self-Governing Territories. The fifteen representatives who compose the Legislative Assembly are elected by the people every four years, they are in charge of managing the internal affairs. Of the elected members of the Legislative Assembly, five are elected to serve as ministers in a Cabinet headed by the Governor. The head of government is the Prime Minister.

The governor is appointed by the King/Queen of the United Kingdom on the advice of the British Government to represent the monarch.

The Cayman Islands has a solid economy, with one of the highest per capita income worldwide. Being also one of the most expensive places to live, since most products are imported and are subject to high tariffs.

Its main sectors are luxury tourism for its pristine beaches, scuba diving and high-end gastronomy, and offshore financial and insurance services, with hundreds of licensed banks, which handle about $500 billion in assets.

The Cayman Islands is one of the 5 largest financial centers in the world by deposits and the world’s largest financial center for investment funds, with the presence of the global largest financial institutions.

Main financial services available in the territory are private banking, hedge fund formation, and investment, trust services, structured finance and securitization, captive insurance, and international business company services.

Services

We can help you incorporate a Limited Liability Company in Cayman Islands for $4,000.


Description


We pride ourselves in providing the best possible professional service which includes our honest hassle-free “No Hidden Fee” policy. Your incorporation package includes:


Cayman Islands Exempted Company Formation – USD 3,400.00 (All included)



  • Government Incorporation Fee

  • Registrar of Companies Filing Fee

  • Stamp Duty

  • Certificate of Registration

  • Memorandum & Articles of Association

  • Appointment of Company Director(s)

  • First Board Resolution

  • Share Certificate(s)

  • Register of Members

  • Register of Directors


Time to form: 4 to 8 business days


Cayman Islands Limited Liability Company (LLC) Formation – USD 4,000.00 (All included)



  • Government Incorporation Fee

  • Registrar of Companies Filing Fee

  • Stamp Duty

  • Certificate of Registration

  • Articles of Organization

  • LLC Operating Agreement

  • Register of Members

  • Register of Managers


Time to form: 6 to 12 business days


All our incorporation services include a yearly consulting session, a dedicated account manager and access to our global network of trusted business services, including introductions to accountants, financial, tax and legal advisors at no cost.


Annual fees (Payable every 1 January)


Exempted Company – USD 2,600.00


Limited Liability Company (LLC) – USD 3,000.00


Including:



  • Registered Office Fee

  • Registered Agent Service Fee

  • Maintaining Minute Book, Registers and Statutory Records

  • Annual Government Fee


Bank Account Opening Support Services (Optional)


Bank Account Options*:



  • Cayman Islands Bank Account (Remotely) – USD 700.00

  • Offshore Bank Account** (Remotely) – USD 300.00

  • Mauritius Bank Account (Remotely) – USD 600.00

  • Labuan (Malaysia) Bank Account (Remotely) – USD 500.00

  • Bahamas Bank Account (Remotely) – USD 500.00

  • Curaçao Bank Account (Remotely) – USD 500.00

  • Singapore Bank Account (In-person) – USD 900.00

  • Hong Kong Bank Account (In-person) – USD 1,200.00

  • Cyprus Bank Account (In-person) – USD 1,200.00

  • Armenia Bank Account (Remotely) – USD 1,200.00

  • New York (US) Bank Account (Remotely/In-person) – USD 2,000.00

  • Cook Islands Bank Account (Remotely) – USD 600.00


For Private Wealth Structures, we have further options available in large financial centers. Please contact us for more information.


*This accounts’ schedule of fees are for trading, service and holding companies whose activities are not regulated and are considered low-risk by financial industry standards. If you conduct regulated activities such as financial services or gaming, or you operate in a high-risk industry such as cryptocurrencies, precious metals, adult, dating. Please also contact us for more information relating to these industries.


**Offshore Bank Accounts: Belize, Puerto Rico, Nevis, Antigua, Saint Lucia.  Other bank account options may be available depending on business profile and turnover.


Our Bank Account Opening Support Service includes:



  • Introduction to the Bank Manager

  • Bank Account Opening Process Management

  • Assistance and advice in filling out Business Questionnaires, KYC Forms and Bank Account Application Forms.

  • Certified Copies of Constitutional Documents

  • Corporate Seal


Our banking service is not just a mere introduction to the bank. We assist you in filling out the business plan forms appropriately and help you understand and provide business details, commercial information and purpose/use of the bank account that a given bank wants to know in order to approve your account application.


Banks want certainty and clarity on how the account will be used. Everything must be watertight. We will work with you to make sure there is minimal ‘back and forth’ and a smooth account opening process


Local Directorship Services (Optional)



  • Local Director (Natural Person) – USD 7,500.00 p.a.






Click here to incorporate your Cayman Islands LLC.

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Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

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