Cayman Islands: Memorandum - The Formation And Management Of Cayman Islands Companies

Last Updated: 3 September 1998

The following details are intended to provide information for clients of this Firm wishing to form a Company in the Cayman Islands. We recommend that tax experts in the Client's country of residence be consulted at an early stage to assess the tax implications of the Client's proposals.

ADVANTAGES OF REGISTERING A COMPANY IN THE CAYMAN ISLANDS

  • No personal or corporate taxes. No estate or inheritance taxes.
  • British Colony. No independence movement.
  • Political stability.
  • Racial harmony.
  • English law is applicable and the language is English.
  • Excellent communications, daily flights from Miami and several flights a week from Atlanta, Houston, Jamaica, Tampa and New York.
  • Efficient telex, telephone, telefax, cable and postal facilities.
  • No exchange control regulations.
  • Excellent professional and banking services.
  • Secrecy. The laws of the Cayman Islands have been formulated to maintain the utmost secrecy.

TYPES OF COMPANY

The following types of Company may be registered in the Cayman lslands:-

[1] EXEMPTED COMPANIES

A Company which proposes to carry on its business mainly outside the Cayman Islands may be registered as an exempted Company. Some features of an Exempted Company are as follows:

  • The shareholders of the Company are not on public record, and are not known to the Registrar of Companies.
  • In January of each year the Company must file with the Registrar of Companies a Statement signed by the Secretary or a Director that the operations of the Company have been mainly outside the Cayman Islands and that the provisions of the Companies Law have been complied with. There are no other annual reporting requirements.
  • The Company may issue Bearer Shares.
  • The name of the Company need not include the word "Limited" or "Ltd."
  • The Company may obtain a Guarantee from the Government against the imposition of future taxes in the Cayman [stands, such Guarantee is normally granted in the first instance for a period of 20 years.
  • The Company may alter its Memorandum of Association without restriction.
  • The Directors must hold at least one meeting in the Cayman Islands each year. Such meeting may be held by Alternate Directors which we can provide.
  • The Company may not own a British registered ship, except in very special circumstances.

(2) ORDINARY COMPANIES

These Companies may either be designated resident and used for local purposes within the Cayman Islands, or non-resident and used for offshore purposes. Some features of an Ordinary Company are as follows:-

  • The Company is required to maintain at its Registered office and open to public inspection, a Register of Members containing the names, addresses of its past and present shareholders. If required, nominees may be used and the information contained in the Register will relate to the nominees and not to the beneficial owners.
  • An Annual General Meeting of members must be held once in each year including the year of incorporation. This meeting need not be held in the Cayman Islands.
  • The name of the Company must include the word "Limited" or "Ltd."
  • In January of each year the Company must file a Return with the Registrar of Companies giving details of its authorised and issued capital and shareholders.
  • Subject to certain restrictions the Company may alter its Memorandum of Association with respect to the objects of the Company and its share capital.
  • The Company may own a British registered ship even though the
  • beneficial owners of the Company are not British Subjects.

(3) FOREIGN COMPANIES

Foreign Companies are defined as all bodies corporate incorporated outside the Cayman Islands which establish a place of business or commence carrying on business within the Islands. Every foreign company must be registered as such within one month after becoming a foreign company as defined above. Once registered, a foreign company has the same power to hold lands in the Islands as if it were a Company incorporated in the Cayman Islands.

(4) SHELF COMPANIES

We keep a number of Ordinary and Exempted Companies available for immediate purchase. Fees are US$200.00 more than normal for Companies incorporated in the current year. Fees for older Companies depend on the date of incorporation.

REGISTRAR OF COMPANIES

In the case of each of the above companies a List of Directors and Officers must be filed with the Registrar of Companies. The Registrar must be advised of any changes in Directors and Officers. The above information is kept confidential by the Registrar as are details of the shareholders of an Ordinary company. The only information which the Registrar will give to the public is as follows:-

  • Whether the subject company is an Ordinary, Exempted or a Foreign Company.
  • The address of the Company's Registered Office.
  • Date of Registration.

ACCOUNTS

There is no requirement for the filing of accounts but the provisions of Section 58 of The Companies Law should be noted:

[1] Every company shall cause to be kept proper books of account with respect to......

  • all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place;
  • all sales and purchases of goods by the company;
  • the assets and liabilities of the company.

(2) For the purposes of subsection (1), proper books of account shall not be deemed to be kept with respect to the matters aforesaid if there are not kept such books as are necessary to give a true and fair view of the state of the company's affairs and to explain its transactions.

INFORMATION REQUIRED FOR INCORPORATION

(a) Choice of three names for the Company in order of preference.

(b) Whether an Ordinary or Exempted Company is required.

(c) The authorised share capital of the Company. We recommend that a company be incorporated with an authorised capital of US$50,000.00 this being the maximum authorised capital permitted for the minimum Government fees.

(d) A brief outline of the main objects of the Company.

(e) The name and address of the beneficial owners of the shares and the number of shares which are to be issued to each shareholder or, if it be the case, that they are to be registered as bearer shares or in the name of nominees.

(f) The names, addresses and occupations of the Directors and Officers. The Company may appoint such Officers as it requires but we normally recommend only a Secretary and an Assistant Secretary. A sole Director may not also be the Secretary.

It usually takes about five working days to arrange the incorporation of a standard company although in certain circumstances this may be considerably reduced.

MAINTENANCE OF COMPANY

We have incorporated Campbell Corporate Services Limited and three subsidiary companies to provide certain corporate services for our Clients. In the case of nontrading companies with passive investments e.g. bank accounts, real estate other than in the United States, etc. the Directors and Officers of the company may be provided through these companies. If the Directors and Officers are provided, a written indemnity from the Beneficial Owners is required, The form of the indemnity is attached hereto as Schedule 11.

INCORPORATION AND MAINTENANCE FEES

Please see Schedule 1.

Incorporation and prorated management fees are normally payable in advance of incorporation by cheque to us or wire transfer to:


Chase Manhattan Bank,
1 Chase Manhattan Plaza
New York 10081
ABA #021000021
for credit AIC #001 153103 Royal Bank of Canada, Grand Cayman for further credit to Bruce Campbell & Co. A/C #200-665-8.

REFERENCES

Character references relating to the directors and beneficial owners of the Company should be forwarded to us at the time of incorporation. Such references should be obtained from the person's lawyer or bank and may be addressed "To Whom It May Concern". Picture and signature identification will be required (x2), and these can take the form of photocopies of the relevant pages of your passport and driver's licence. Information will also be required in regard to the source of funds which will be invested in the Company and/or by the Company.

If the Company intends to open a bank account in the Cayman Islands, a bank reference will be required in respect of all persons authorised to sign on the account, together with similar picture and signature identification as set out above. A minimum deposit of US$500.00 or US$1,000.00 will be required, depending on the bank chosen, as an initial credit to the account. We can arrange for the opening of the account with a bank of the client's choice at the first meeting of the Board of Directors.

SCHEDULE 1

(Effective 1 April 1994)

(1) INCORPORATION FEES

Our fees for the incorporation of companies including the Government's minimum registration fees are US$1,800.00 for an Ordinary Non-Resident Company and US$1,875.00 for an Exempt Company. The fees are based on the assumption that a completely standard company is prepared and any variation to our standard form or any special expedition will result in increases in these fees.

Our fees for registering a Foreign company inclusive of disbursements are US$1,600.00.

(2) MAINTENANCE FEES

An annual fee of US$1,000.00 is charged for the provision of any one or more of the under-mentioned services by Campbell Corporate Services Limited:-

  • Maintaining the Registered Office.
  • Keeping Statutory Records.
  • Preparing Minutes of the Annual General Meeting.
  • Preparing Minutes of the Statutory Directors Meeting (Exempt Companies only).
  • Preparing and filing Annual Return. Providing nominee shareholders.
  • Providing Campbell Secretades Limfted as Secretary or Assistant Secretary.
  • Providing Post Box facilities and forwarding mail.
  • Preparing Minutes of up to two other Shareholders and/or Directors Meetings.

Where the Directors of a Company are provided an annual fee in addition to the above is charged. The amount depends on the type of service provided. There is a minimum fee of US$1,000.00 for providing the Board of Directors.

Where Alternate Directors are provided for the purposes of Exempted Companies' Statutory Meetings or where Authorised. Officers are provided pursuant to The Merchant Shipping Acts an annual charge of US$200.00 is made in either case.

The above charges are pro-rated quarterly to the 31st December during the year of incorporation. Annual accounts are normally rendered in November of each year for the forthcoming year. Fees for additional services are normally charged on a time basis.

(3) MINIMUM ANNUAL GOVERNMENT FEES


EXEMPTED                 ORDINARY                 FOREIGN
US$500.00                US$426.83               US$609.76

SCHEDULE 2


TO:   The Partners,
      Messrs. Bruce Campbell & Co.
      Attorneys-at-Law,
      P.O. Box 884, Grand Cayman


      Dear Sirs:

                           RE:


In consideration of your agreeing to provide and having provided 
in the past, management services, for the above Company 
of which I am the beneficial owner, I hereby undertake and agree 
to indemnify you and hold you harmless and keep you indemnified 
and held harmless from all actions, suits, proceedings, claims, 
demands, costs and expenses whatsoever which may be taken or 
made against you or which may be incurred or become payable by 
you in respect of or arising out of any partner or employee of 
your Firm or director, officer or employee of Campbell Directors Limited. 
Campbell Nominees Limited, Campbell Secretaries Limited or Campbell 
Corporate Services Limited having acted in the past or in the 
future acting as officer, director of the Company or having held 
or holding in future any shares in the Company 
or by reason of or in consequences of any decision or act made 
by any such person in relation to the management or administration of 
the said Company. In addition, I undertake to supply you with information 
that is required to be filed by you or your Firm in your 
capacity as directors or Registered office where such 
information is required to be disclosed under the provisions of the 
Companies Law of the Cayman Islands.

I acknowledge that I have read and understand the provisions of 
Section 58 of the Companies Law 1990 and I undertake to keep 
you advised of all transactions and business activities of the Company 
together with details of all deposits, loans and payments made to 
or by the Company and information as to what each payment or receipt 
represents.


Dated this           day of            19


BENEFICIAL OWNER


SIGNED in the presence of.



WITNESS

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 Mondaq.com.

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

 
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
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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