INTRODUCTION

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:

  1. the sale by or on behalf of a foreign company of its shares or debentures; and

  2. 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.

PROCEDURE

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:

  1. the relevant company's constitutional documents (authenticated under public seal);

  2. a list of its directors and their addresses;

  3. details of a registered office for the company in the Cayman Islands; and

  4. a registration fee of approximately US$1,040.00 per company.

ONGOING REQUIREMENTS

The foreign company is required to comply with the following obligations:

  1. 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 relevant year;

  2. 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

  3. 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.

PENALTIES

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.

DE-REGISTRATION

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.

REGISTERED OFFICE

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.

Cayman Islands

Jonathan Tonge, Partner

London

Antonia Hardy, Partner

Jersey

Heather Bestwick, Partner

British Virgin Islands

Heidi de Vries, Partner

Hong Kong

Hugh O'Loughlin, Partner

Dubai

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.