In this two part piece, we look at how to migrate existing companies in and out of the Cayman Islands. Elsewhere we look at how to migrate an existing company into the Cayman Islands, but here we look at how to migrate a Cayman Islands registered company to another jurisdiction.
Who can apply?
Any exempted company which is incorporated and registered with limited liability and a share capital under the Cayman Islands Companies law. This includes companies which have migrated to the Cayman Islands from another jurisdiction.
A company (the "Applicant") applies to the Registrar of Companies (the "Registrar") to be de- registered in the Cayman Islands, in such a way that it continues as a body corporate limited by shares, but instead of being a company registered in the Cayman Islands it is a company registered under the laws of another jurisdiction.
What are the restrictions?
The Registrar will de-register an Applicant provided certain conditions are met. These include practical issues such as whether the Applicant's own constitution allows it to move, whether the proposed jurisdiction will allow the transfer, and if all relevant contractual consents have been obtained. The Registrar will also need confirmation that the Applicant is solvent, and that the move is not being undertaken for fraudulent purposes. To that end the Registrar needs to know that there are no outstanding proceedings filed or Orders made against the Applicant, that no receiver, trustee or administrator has been appointed, and to be sure that nothing has been done to restrict the rights of the Applicant's creditors. The Applicant must deliver to the Registrar an undertaking signed by a director that notice of the transfer has been or will be given within twenty-one days to the secured creditors of the applicant.
Provided the Registrar is not aware of any other reason why it would be against the public interest to de-register the applicant, and the Applicant pays the appropriate fee, gives notification of the its new registered office and address for service and confirms that it will continue as a company in its new jurisdiction, then the Registrar will proceed to de register the Applicant. However, if the Applicant is licensed under the Banks and Trust Companies Law (2009 Revision), or the Insurance Law, 2010 or, if it had a licence which was suspended or revoked and not reinstated, the Applicant will need the consent of the Cayman Islands Monetary Authority before it can transfer.
As with migrating a company to the Cayman Islands a Director of the Applicant can satisfy some of the requirements above by filing a declaration or affidavit ("Affidavit") to the effect that, having made due enquiry, he or she is of the opinion that those requirements have been met. The Affidavit also needs to include a statement of the Applicant's current assets and liabilities. If the Director does not have reasonable grounds for matters in the Affidavit, then he or she is liable on summary conviction to five years imprisonment and a $15,000 fine.
Formalities and Certificates
Once the Applicant has been de-registered, the Registrar issues a certificate that the applicant has been de- registered as an exempted company which states the date of de- registration. The Registrar will also enter the date of de-registration in the Cayman Islands register of companies, from which time the Applicant is no longer a company under Cayman Islands Companies Law (although it continues as a company under the laws of its new jurisdiction). The Registrar will give notice in the Gazette that the Applicant has been de-registered, details of the new jurisdiction and any new name under which the Applicant is registered.
What does not change
The point of the process is that the Applicant continues as a company, just not one registered in the Cayman Islands. That means that this process does not create a new legal entity, and does not prejudice or affect the identity or continuity of the Applicant under its previous constitution. There is no change to the property it holds, any appointment, resolution or other act which has already been lawfully made, or render defective any legal proceedings by or against the Applicant.
Goodbye to the Cayman Islands.
Whatever your reasons for leaving the Cayman Islands, even though the process is relatively straightforward the best way to migrate a company out of the Cayman Islands is to use the services of a tried and trusted local adviser. They have experience of the process and a good working relationship with the local officers. For example, it is prudent to ensure that the Applicant's departure out of Cayman occurs on the same day as its arrival in its new home country in a seamless fashion which means that the legal advisers in both jurisdictions need to work closely and efficiently together on the migration arrangements. This avoids any uncertainty of the Applicant's status during any gap in time between leaving and arriving. At Solomon Harris we are pride ourselves on our ability to provide timely, efficient and cost-effective corporate services, and would be happy to advise you on all aspects of migrating a company from the Cayman Islands. Our dedicated corporate services provider, Solaris Corporate Services Ltd, which is regulated by the Cayman Islands Monetary Authority, provides corporate and registered office services for Cayman Islands companies, funds and partnerships.
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.