INTRODUCTION

There are no taxes on companies or individual and no inheritance taxes or estate duties in the Cayman Islands. Government revenue is principally derived from import duties, tourist taxes, stamp duties, registration and license fees.

STAMP DUTIES

The principal heads of duty are set out below:

                                                     CI$
Agreement or Memorandum of Agreement for the
sale or purchase of any land or strata title:     100.00

In any other case, if under hand and where no
other duty is specified under any other head
or charge:                                          2.00

Assignment of any rights under an Agreement or
Memorandum of Agreement for the purchase of
any land, strata title or other immovable
property for the first two assignments each:      7 1/2% of the
                                                  consideration
                                                  or premium for
                                                  the assignment paid.

Of a debt, policy of life insurance or other
thing in action where no other duty is
specified under any other head of charge
except shares, interests in trust funds, 
interest in partnerships, warrants or options
or other rights to acquire shares, interests
in trust funds or in partnerships:                100.00

Of any rights under an agreement or memorandum 
agreement for or in relation to the purchase of 
or an interest in any land or strata title or 
other immovable property where there is no 
consideration:                                    200.00

Bill of Exchange cheques:                           0.10

Drafts, orders, acceptances, letters of credit,
promissory notes or I.O.U.s for payment to the
bearer or to order of any sum of money not 
exceeding CI$100.00, for every extra CI$100:        0.25

or part thereof to a maximum of 250.00 where any of the instruments specified above are issued as part of a series of instruments (hereinafter called an "issue") ranking equally amongst themselves, such instruments, and any global instrument relating thereto, whether secured or unsecured and any assignment or transfer thereof, shall not be subject to duty under this Law if the issuer is an exempted company or an ordinary non-resident company or foreign company and has paid a duty of CI$500.00 in respect of such issue and the issue s not secured by immovable property situated in the Islands.

Bill of Lading for goods exported:                  0.50

Charter-party:                                     10.00

Conveyance or Transfer on Sale of any
immovable property situate in the Cayman
Islands:                                         7 1/2% of the
                                                 market value.

Deeds not described in the schedule:                6.00

Mortgage

Mortgage being a security by way of mortgage for the payment of any definite sum of money howsoever the instrument creating the same may be described:

being a legal or equitable mortgage of movable or immovable property situate in the Cayman Islands-

( i) where the sum secured is $300,000
     or less:                                1% of the secured sum

(ii) where the sum secured is more
     than $300,000:                          1.5% of the secured sum

being a legal or equitable mortgage
of movable property (not including
a debenture):                                1.5% of the secured sum

being a bill of sale:                        1% of the secured sum

Provided that:
( i) no duty shall be payable under
this head where the property is
situated outside the Cayman Islands:         Nil

(ii) that, in the case of a mortgage
granted by an exempted company or by an 
ordinary non-resident company or body 
corporate incorporated outside of the 
Cayman Islands of movable property 
situated in the Cayman Islands, the 
maximum duty payable shall be:               $500.00

being a collateral or auxillary or
additional or substituted security by way
 of further assurance where the principal
or primary security has been duly stamped:     30.00

release of mortgage of immovable property
whether by way of transfer, surrender,
discharge or other instrument howsoever
called:                                        25.00

Partnership

on every deed or agreement of partnership:     50.00

on every rectification of a deed or
agreement of partnership:                      20.00

Business License Fees

Licenses issued under the Local Companies (Control) Law (1995 Revision)
                                              CI$
annually:                                     200.00

Licenses issued under the Trade and Business Licensing Law (1995 Revision)

the annual fees for such licenses vary generally from CI$50 to CI$10,000 (and in the case of storers of petroleum in bulk CI$50,000).

Licenses issued under the Banks and Trust Companies Law (1995 Revision)

                                              CI$
Class A License:
on issue and annually:                     80,000.00

Class B or Trust License: 
if unrestricted - on issue and annually:   15,000.00
if restricted - on issue and annually:     10,000.00

Trust License: 
if restricted - on issue and annually:      1,640.00

Licenses issued under the Insurance Law (1995 Revision):

                                              CI$
Class A Insurer's License:
on issue and annually:                      7,500.00

Class B Insurer's License:
on issue and annually:                      5,000.00

Licenses issued under Mutual Fund Law:

                                              CI$
Unrestricted Mutual Fund Administrator's
License - on issue and annually:            8,000.00

Restricted Mutual Fund Administrator's
License - on issue and annually:            3,000.00

(plus CI$700.00 for each fund under administration)

Single Fund Mutual Fund Administrator's
Exemption - on issue and annually:          1,000.00

Licenses issued under Companies Management Law:

                                              CI$
Company Manager's License - on issue:         500.00

(plus CI$15 for each managed company)
annually:                                     500.00
Gainful Occupation Licences under the Immigration Law the annual fees vary from CI$100.00 to CI$6,000.00.

Companies Law

Incorporation and annual fees payable under the Companies Law (1995 Revision)

Exempted Company
Incorporation and annual fee, payable in January each year

                                              CI$
Minimum fee (authorised capital not
exceeding CI$42,000):                         410.00

Median fee (authorised capital exceeding
CI$42,000 but not exceeding CI$1,700,000):    574.00

Maximum fee (authorised capital exceeding
(CI$1,700,000):                             1,435.00

Exempted Limited Duration Company;
Additional incorporation fee:                 200.00

Ordinary Non-Resident Company
Incorporation and annual fee, payable in January each year

                                              CI$
Minimum fee (authorised capital not
exceeding CI$42,000):                         350.00

Maximum fee (authorised capital exceeding
CI$42,000):                                   492.00

Conversion to exempted company;
fee equal to exempted company incorporation fee (see above)

Ordinary Resident Company
Incorporation and annual fee, payable in January each year

                                              CI$
Minimum fee (authorised capital not
exceeding CI$42,000):                         150.00

Maximum fee (authorised capital exceeding
CI$42,000):                                   250.00

Foreign Company

                                              CI$
Registration fee:                             850.00

Annual fee payable in January each year:      500.00

Initial provisional registration fee to
transfer by way of continuation:            1,500.00

Annual provisional registration fee to
transfer by way of continuation:            1,000.00
Registration fee to transfer by way of continuation; fee equal to registration of an exempted company (see above)

Limited Partnerships

Registration fees and annual fees payable under the Partnership Law (1995 Revision) and the Exempted Limited Partnership Law 1991.

                                              CI$
Limited Partnership Registration fee:         850.00
Annual fee payable in January each year:      475.00

Exempted Limited Partnership

                                              CI$
Registration fee:                             850.00
Annual fee payable in January each year:      475.00

Mutual Funds

Registration and annual fees payable under the Mutual Funds Law 1993.

Licensed Mutual Fund
                                              CI$
Registration fee:                             700.00
Annual fee payable in January each year:      700.00

Regulated (but unlicensed) Mutual Fund
                                              CI$
Registration fee:                             700.00
Annual fee payable in January each year:      700.00

Trusts

Registration fees and annual fees payable under the Trusts Law (Revised).

Exempted Trust
                                              CI$
Registration fee:                             400.00
Annual fee payable in March each year:        100.00

Import Duties

These are specified in the Schedule to the Customs Law 1990. There is a general import duty of 20%, but some specified items can be imported at reduced rates of duty and others without paying duty at all. Motor vehicles are subject to a minimum duty at 27.5% and maximum duty of 40% on vehicles valued at more than CI$30,000.

This information provides an introduction to aspects of establishing business in the Cayman Islands for the benefit of clients who may be considering using the Islands as an offshore domicile. It is not exhaustive and is merely intended to give a broad indication of possible courses of action.

Before taking action on any business or other decisions related to the Cayman Islands, specific and particular advice should be sought from domestic taxation, legal, accountancy and other relevant professional advisers.

The information provided reflects the laws and regulations existing at December 31, 1996, but later developments have been noted where possible.

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.