Location:
The Cayman Islands (CI), situated in the Caribbean, consists of three islands
with a total area of 102 square miles. Grand Cayman, which is the main
island, is located about 450 miles south of Florida.
Language: The
official and spoken language is English.
Population:
The population is approximately 26,000, and the majority of the people live
on Grand Cayman.
Political System:
The Cayman Islands is a British colony, and the United Kingdom Parliament
at Westminster has the legislative powers. The queen appoints a governor
who is the head of the Cayman Islands government. He is responsible for
the defence, civil service, external affairs, and law and order. An executive
council formulates policy and advises the governor.
Legal System:
Cayman Island law is based on English Common Law. The CI have their
own courts of law with the rights of appeal to the Cayman Court of Appeal
and to the Privy Council in England.
Taxation: The
Cayman Islands is a tax haven with no direct taxation on residents or
corporations. There are no capital gains, gift or inheritance taxes, but
there is a stamp duty on real property of 7.5% on transfer and 1% on mortgages.
Incorporation:
There are three different kind of companies available: ordinary non-resident
companies, ordinary resident companies and exempt companies. The companies
may be limited by shares, by guarantee or unlimited. Exempt companies are
used primarily by non-residents for international tax-planning purposes.
Authorization to incorporate a company is not compulsory unless the nature
of the company's activities is subject to special supervisory requirements.
Requirements for incorporation
of an exempt company are:
The company must keep a registered
office address in the Cayman Islands, but it is not allowed to own real
property.
The company may not transact
any business with residents of the Cayman Islands, and it may not carry
on business in the Cayman Islands, other than to promote its international
activities.
At least one director, who can
be either a person or corporation of any nationality, is required. If there
is only one director, it is normal policy to appoint a company secretary,
but it is not a requirement.
A minimum of one shareholder,
who can be a person or corporation of any nationality, is required.
A minimum of one meeting a year
must take place in the Cayman Islands; however, it is allowed to use local
alternative directors.
For incorporation under the
Companies Law, a Memorandum of Association has to be filed with the Registrar
of Companies. It must include:
The registered office address
The name of the company
The objects of the company
The share capital
A statement that the liability
of its members is limited
A company can use any name unless
it includes words that could imply a connection with the royal family or
the government. Names such as Insurance, Bank and Trust can not be used
without permission and issuance of the appropriate licence. In order to
indicate limited liability, the company may use the words Limited, Corporation,
Societe Anonyme, Incorporated or abbreviations.
A company is not required
to file information regarding the directors, shareholders and officers,
and there is no requirement to file accounts of the company's financial
affairs.
Exempt companies are normally
incorporated with an authorized share capital of US$ 900,000 or its foreign
currency equivalent. This is the maximum authorized share capital for the
minimum government fees. Exempt companies may issue par value, no par value
or bearer shares. Bearer shares have to be fully paid up.
Special Features:
An exempt company can be incorporated
within two to three days
Ready-made companies are available
for immediate use
Exempt companies receive a guarantee
against any form of Cayman Island taxation, which is valid for 20 years
from the date of initial exemption
Summary: Following
are some of the advantages of selecting the Cayman Islands as an offshore
center:
A well-established international
banking system
A modern Companies Law providing
maximum flexibility
No filing requirements
Immediate company availability
Bearer shares
20 years exemption from local
taxation
Confidentiality
Political, economic and social
stability
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