Cayman Islands: Conducting Business In The Cayman Islands

Last Updated: 30 July 2012
Article by Higgs & Johnson Counsel & Attorneys At Law

Until recently, a business could only be carried on in the local market place in the Cayman Islands through:

  • an individual (i.e. a Caymanian or holder of a Residency Certificate conferring such a right); or
  • a company licenced to carry on business or trade in the Cayman Islands.

On September 28, 2011, a new law was introduced which allows exempted companies or exempted limited partnerships to carry on a "special economic zone business" in a "special economic zone" in the Cayman Islands if they are registered with the Registrar of Companies as a Special Economic Zone Company or Partnership.

Exempted companies or exempted limited partnerships are entities incorporated in the Cayman Islands which are not entitled to engage in trade with any person except in furtherance of business carried on outside the Islands. Under the Special Economic Zones Law, 2011 (the "SEZ Law"), this remains but is distinguished in that, the business, though it has a physical presence in the islands, is deemed to be outside of the Cayman Islands.

What follows, is a summary of the licensing requirements for conducting business in the local market place in the Cayman Islands pursuant to the Companies Law, the Local Companies (Control) Law (Revised) (the "LCCL") and the SEZ Law.


The law provides that no company shall carry on business in the Islands unless:

  • it is a local company which is Caymanian controlled with at least 60% of its shares
  • beneficially owned by Caymanians and at least 60% of its directors are Caymanians;
  • it has been granted a licence under the Local Companies Control Licence Law and
  • under the Trade and Business Licensing Law (Revised);
  • it is licensed under the Bank and Trust Companies Law (Revision); or " it is operating under a franchise granted by the Government.

Application for Licences

Generally, all companies conducting business in the Cayman Islands are required to obtain a Trade and Business Licence. Foreign-owned or controlled companies carrying on business in the Cayman Islands must also obtain a Local Companies Control Licence ("LCCL").

In the absence of securing 60% Caymanian participation, a company can proceed to apply for a LCCL by submitting:

  • an application form along with the requisite processing and licence fee;
  • a copy of the Memorandum and Articles of Association of the company or the bye-laws;
  • a statement setting out the nature of the business the company is carrying on or proposes to carry on;
  • copies of the advertisements seeking Caymanian participation; and
  • such other information as the Trade and Business Licensing Board (the "Board") may require.

Grant of the LCCL

The grant of this licence is entirely at the discretion of the Board and hinges largely on the Board being satisfied that it would be in the public's interest to grant the licence. Each application is assessed on its own merits; however, we should indicate that one factor considered by the Board is, the efforts of the company to obtain Caymanian participation. In deciding whether or not to grant a licence, the law provides that the Board shall have regard to a number of factors including:

  • the economic situation of the Islands and the due protection of persons already engaged in business in the Islands;
  • the nature and previous conduct of the company and the persons having an interest in that company whether as directors, shareholders or otherwise;
  • the advantage or disadvantage which may result from that company carrying on business in the Islands;
  • the desirability of retaining the economic resources of the Islands in the control of Caymanians;
  • the efforts made by the company to obtain Caymanian participation;
  • the number of additional people from outside the Islands who would be required to reside in the Islands were the application to be granted;
  • whether the company, its directors and employees have and are likely to continue to have the necessary professional, technical and other knowledge to carry on the business proposed by the company;
  • the finances of the company and the economic feasibility of its plans;
  • whether the true ownership and control of the company have been satisfactorily established; and
  • the environmental and social consequences that could result from the carrying on of the business proposed to be carried on by the company.

In most cases, a LCCL is granted for a maximum period of 12 years and may be subject to such terms and conditions as the Board may see fit. Once granted, the company is required to pay the prescribed annual licence fee on the anniversary date of the grant of the LCCL and submit a return of shareholdings.

Special Economic Zone Companies

There are a number of benefits to establishing a business in the Special Economic Zone ("SEZ"), including the fact that the 60% Caymanian participation rule does not apply and there is no requirement to obtain a LCCL or Trade and Business Licence. The exempted company or exempted limited partnership is required to (a) register or re-register as a SEZ company/ partnership and (b) obtain a Trade Certificate.

Registration of a Special Economic Zone Company

For a new registration, the process is much the same as with any exempted entity. The Memorandum and Articles should state that the company will be carrying on special economic zone business. The objects are restricted to conducting business mainly outside the Islands. There are no restrictions on the name, except that it must include the words "Special Economic Zone Company" or "SEZC".

If the company already exists as an exempted company, then it may apply to be re-registered as a SEZC and will require a resolution to alter its Memorandum and Articles and change its name as outlined above.

A fundamental requirement of the registration process is that an approval letter to operate in the SEZ must first be obtained from the developer of the SEZ.

Trade Certificate

Upon registration as a SEZC, an application for a trade certificate must be made to the Special Economic Zone Authority ("SEZA"). The application must be supported by evidence of registration as a SEZC in good standing along with the prescribed non-refundable application fee. Other information required includes the following:

  • Applicant Details - including copies of the passports or identification for all Directors;
  • Business Details – nature and type of business being conducted, expected number of employees, exact location of the business, register of Directors and return of Shareholders;
  • Personal Details of each Director – including nationality and questions on conviction of criminal offences or other liability and bankruptcy; and
  • Complete Due Diligence on each director.

Where the application is submitted, SEZA shall within seven days of the application being made or additional information received, grant or refuse the trade certificate.

The trade certificate granted will specify the period of validity, the SEZ business which may be conducted, the name of the SEZ in which the enterprise is authorized to carry on business, the address of the premises from which the SEZ business is to be conducted, and all terms and conditions, if any. The trade certificate may be amended on an application to the Authority and payment of the requisite fee.

The trade certificate is not transferable or assignable but is subject to voluntary surrender, suspension or revocation in accordance with the SEZ Law. As with any other Cayman Islands company, the SEZC is subject to an annual fee.

There are a number of unique concessions of doing business within the SEZ but this will form the subject of a later article.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Higgs & Johnson Counsel & Attorneys At Law
Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions