Formation

Formation of Cayman Islands Company - Background

 

Accolade Corporate Services Limited

 

Hong Kong Head Office
Rm 701-2, 7/F, Fu Fai Commercial Centre, 27 Hillier Street, Sheung Wan, Hong Kong.


Tel .+852 3521 2888
Fax +852 3521 2800
Email info@accoladegroup.com.hk

 

 

Please contact our professionals:

- Miss Tsui .. +852 3521 2885

- Miss Ip ...... +852 3521 2887

 

 

China Hotline +86 13068485056

 

WhatsApp / WeChat:

+852 9635 6038

+852 6567 0408

+852 6728 7840

 

 

Office Hours﹕

Monday to Friday 09:00 - 18:00

Saturday, Sunday and Public Holiday Off

 

 

 

Formation of Cayman Islands Company - Background


The Cayman Islands are a British colony situated in the Caribbean sea approximately 500 miles South of Miami, Florida, with a population of approximately 50,000 people of mixed origin. The Islands enjoy sophisticated legal, accounting and banking services and derive political stability by virtue of their connection with Britain. The legal system is British and the government is headed 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.


Legal System

The Islands are a common law jurisdiction, and aside from the addition of a number of statutes to reflect the particular needs of the buiness community, have adopted a system similar to that of the UK. The court system comprises four tiers: the Summary Court; the Grand Court; the Court of Appeal; and the Privy Council, which is the court of final appeal and is seated in London.


Type of Companies Available from Cayman Islands

Ordinary Companies:

An ordinary company incorporated in Cayman Islands must have at least one shareholder of record and at least one director. An annual general meeting must be held each calendar year. A Cayman ordinary company must file an annual return detailing its shareholders, with the Registrar of Companies. The Register of Members is maintained at the registered office and is open to inspection by any person.

Ordinary Non-Resident Companies:

The provisions are the same for ordinary companies except that the company must be designated a non-resident company by certificate issued by the financial secretary, provided that he is of the opinion that it does not, and does not intend to, carry on business within the islands. Ordinary non-resident companies may be converted to exempted companies.

Cayman Islands Exempt Companies:

An exempted company is incorporated in the same way as an ordinary company and must have at least one director. An exempted company may not carry on business in the Cayman Islands except in furtherance of its business abroad, and may not make any invitation to the public in the Cayman Islands to subscribe for any of its shares or debentures and it may not own land in the Cayman Islands unless given specific permission by the financial secretary. (See below for some of characteristcs of the Cayman Islands Exempt Companies)

Limited Duration Companies:

A limited duration company ("LDC") is broadly similar to the limited liability company in the United States. The LDC combines the benefit of limited liability and the convenience of administration of a corporate entity with the possibility of a transparency or flow-through for tax and other purposes in foreign jurisdiction such as treatment as a partnership for United Federal Income Tax purposes.The Companies Law permits the use of the basic exempted company as an alternative to the LDC, in circumstances where a company with a fixed life is required, but where the maximum 30-year duration of the LDC is unattractive.

Foreign Companies:

A foreign company is a company that is incorporated outside the Cayman Islands, and establishes a place of business or commences carrying on business within the Cayman Islands. A foreign company who wishes to own land in the Cayman Islands must register as a foreign company under Part IX of the Companies Law.

A foreign corporation must state the name of the foreign company and the country which it was incorporated on all letterhead, bills, notices, advertisements and any other official publications such as a prospectus inviting subscriptions for its shares. It must also exhibit on every place where it carries on business in the Cayman Islands the name of the foreign corporation and the country which the foreign corporation is incorporated. Also, if the liability of the members of the foreign company is limited, it must publish this on all letterhead, bills, notices, advertisements and any other official publications.


Characteristcs of the Cayman Islands Exempt Company

Taxation:
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 custodian in the Cayman Islands to be held to the order of the beneficial owner.

Directors:
Details of the directors 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. A minimum of one director is required. Corporate directors are permitted.

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.

Local Requirements:
As a matter of local company law the company MUST maintain a registered office address within the Cayman Islands and must also appoint a Cayman resident as registered agent. We would generally provide these services as part of the domiciliary service fee.