The (as amended) (the "Companies Law") provides that all bodies corporate incorporated outside the Cayman Islands that carry on business within or establish a place of business in the Cayman Islands must register with the Cayman Islands Registrar of Companies (the "Registrar") as a foreign company.
CARRYING ON BUSINESS IN THE CAYMAN ISLANDS
The Companies Law sets out a non-exclusive list of what constitutes carrying on business and this includes:
- the sale by or on behalf of a foreign company of its
shares or debentures; and
- offering, by electronic means, and subsequently
supplying, real or personal property, services or information
from a place of business in the [Cayman] Islands or through
an internet service provider or other electronic service
provider located in the [Cayman] Islands. It will be
necessary for a foreign company which proposes to be a
general partner to a Cayman Islands exempted limited
partnership (where there is no other general partner
incorporated or registered as a foreign company in the Cayman
Islands) to register as a foreign company.
The procedure for registering as a foreign company is not onerous and involves filing with the Registrar, within one month of establishing or commencing carrying on business in the Cayman Islands, the following:
- the relevant company's constitutional documents
(authenticated under public seal);
- a list of its directors and their addresses;
- details of a registered office for the company in the
Cayman Islands; and
- a registration fee of approximately US$1,040.00 per
The foreign company is required to comply with the following obligations:
- pay, in January of each year, an annual fee of
approximately US$1,040.00 to keep the company registered as a
foreign company. There are rising penalties for late payment
of the annual fee if payment is not made by 31 March in the
- notify the Registrar any time an alteration is made to
any of the documents or information which were required to be
provided to the Registrar on registration. The notification
is required to be made within 21 days of the date on which
particulars of the alterations could in due course of post
and if despatched with due diligence have been received in
the Cayman Islands from the place where the foreign company
is incorporated; and
- make disclosure and conspicuously exhibit (for example in
prospectuses, on letterhead and bills, notices,
advertisements and other official publications and place
where it carries on business in the Cayman Islands that it is
a foreign company, which country it is incorporated in, and
(if relevant) that the liability of the members of the
company is limited.
There are financial penalties which may be imposed on the officers of a foreign company which fails to comply with the relevant provisions of the Law. The fine is approximately US$125.00 plus US$12.50 per day the foreign company remains in default.
If the Registrar of Companies either receives notice from the foreign company (which the foreign company is required to give on ceasing to carry on business or to have a place of business in the Cayman Islands) or is satisfied by any other means that the foreign company has ceased to carry on or have a place of business in the Cayman Islands, the obligations of the foreign company under the law will cease and the Registrar of Companies may close its file on the foreign company. It will then cease to be listed on the register maintained by the Registrar of Companies.
Walkers SPV Limited would be pleased to act as the registered office should you require this. It currently charges an annual fee of US$1,000.00 for each company. Please refer to your Walkers' contact for further details.
Jonathan Tonge, Partner
Antonia Hardy, Partner
Heather Bestwick, Partner
British Virgin Islands
Heidi de Vries, Partner
Hugh O'Loughlin, Partner
Rod Palmer, Partner
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.