Cayman Islands: Cayman Companies

Last Updated: 9 June 2008
Most Read Contributor in Cayman Islands, November 2017


The object of this Memorandum is to provide information on the formation and operation of the different varieties of company available in the Cayman Islands. We would, however, strongly recommend that our clients consult local tax specialists in their own jurisdictions to ensure the effectiveness of their proposals.


Exempted Companies

The Companies Law of the Cayman Islands provides for a category of companies which will carry on business mainly outside the Islands. Such companies - called "exempted companies" - provide the vehicle that we would normally recommend to clients wishing to form a corporate body for offshore business.

Exempted companies are unsurpassed in the offshore financial world for flexibility, sophistication and speed of incorporation.

The key features of exempted companies are set out below.

  1. An exempted company is entitled to receive a tax-free guarantee from the Government of the Cayman Islands for up to 30 years. The Government in the first instance normally grants a guarantee for 20 years, but it is normally renewable for a further ten years on expiry.

  2. The identity of the shareholders of an exempted company are not a public record and are not known by any Governmental authority in the Cayman Islands.

  3. Annual reporting requirements are minimal and consist only of a statement, signed by the company secretary or a director, that the company has conducted its operations mainly outside the Cayman Islands and has complied with the provisions of the Companies Law.

  4. The law permits an exempted company to issue bearer shares.

  5. The name of an exempted company need not include the word Limited or the abbreviation Ltd. However, if the company is to be a limited duration company (see below), the name must contain the words Limited Duration Company or the abbreviation LDC.

  6. The law permits an exempted company to issue shares without nominal or par value.

  7. An exempted company may deregister itself in the Cayman Islands and transfer by way of continuation to another jurisdiction whose laws allow or do not prohibit the transfer. Similarly, a company incorporated in a jurisdiction elsewhere may register by way of continuation as an exempted company in the Cayman Islands.

Limited Duration Companies

A recent amendment to the Companies Law now allows an exempted company to be established as, or converted into, a limited duration company ("LDC"). The intent of the law is to allow the formation in the Cayman Islands of an entity similar to what is known in the United States of America as a Limited Liability Company and allows the establishment of such a company offshore. An LDC can be converted back to an exempted company upon payment of a de-registration fee of US$488.00.

An LDC continues until the time or event specified in its Memorandum of Association. Its duration must not exceed 30 years. An LDC is required by statute to have at least two members. Upon its duration expiring or the happening of a specified event, an LDC is deemed to have automatically commenced voluntary winding up and dissolution. An LDC may be wound up earlier voluntarily if the members pass a special resolution to that effect. Compulsory liquidation remains available to creditors of the LDC and also for its members in the circumstances applicable to other companies incorporated under the Companies Law.

Special features applicable to an LDC are set out below.

  1. The Articles of Association of an LDC may provide that the transfer of any share of a member requires the unanimous resolution of all other members.

  2. The Articles of Association of an LDC may provide that the management of the company is vested in the members either equally per capita or in proportion to their share holding. The members are then considered to be the directors of the company. However those members can delegate management to a board of directors.

  3. Subject to any contrary provision in its Memorandum and Articles of Association, an LDC is taken to have commenced voluntary winding up on the expiry of 90 days from:

(a) the death, insanity, bankruptcy, dissolution, withdrawal, retirement or resignation of a member; or

(b) the redemption repurchase or cancellation of all the shares of a member; or

(c) the occurrence of any event which in terms of the Memorandum or Articles of Association terminates the membership of a member,

unless there remain at least two members of the company and they resolve unanimously to continue it in existence.

The LDC has been designed to be on all fours with "Limited Liability Companies" and as a result to receive treatment by the Internal Revenue Service as partnerships. They do however have many aspects of corporate existence, including separate personality and limited liability.

Non-Resident Companies

Approval for a non-resident company designation may be obtained on submission of a certificate to the Financial Secretary of the Cayman Islands that the company does not intend to carry on business in the Cayman Islands.

The non-resident company is an alternative offshore vehicle to the more commonly used exempted company. The law requires a non-resident company to maintain a publicly available register of past and current member at the Registered Office. Furthermore a director or secretary is required to file an annual return to the Registrar of Companies stating the names and addresses of members, directors and officers and the amount of paid-up capital. Although non-resident companies are unable to receive a tax-free guarantee from the Government they are presently not subject to any form of taxation in the Cayman Islands.

Re-registration of a non-resident company as an exempted company is easily achieved and preserves the basic structure of the company.


Companies may be formed with or without limited liability and in the former case may be limited by shares or limited by guarantee. Companies may also have classes of both limited liability shares and unlimited liability shares. Usually, companies are formed with limited liability and are limited by shares.

Upon receiving the following information by letter, telefax or telephone, we can proceed to incorporate the company, usually within 24 hours of receipt of instructions. The Registrar of Companies normally issues a Certificate of Incorporation within 2-3 days of filing. The information we require is set out below.


A proposed name of the company with two alternatives, which we will submit for approval.


The status of the company, ie exempted, LDC or non-resident. We normally recommend an exempted company or an LDC for offshore business.

Limited or guarantee

Is the company to be limited by shares or by guarantee? A company will normally be limited by shares.

Authorised share capital

Under the present laws we would normally recommend that a company be incorporated with an authorised capital of US$50,000.00. This figure is just short of the maximum authorised capital permitted for payment of the minimum Government fee.

Issue of capital

We need to know the amount of share capital to be issued, any special classes of shares (with details of special provisions), and what the par value of the shares will be.


Details are required concerning the name and the address of each beneficial owner of the shares, whether the shares are to be in registered or bearer form, and the number of shares the company will issue to each shareholder. Even if the shares will be bearer shares or will be held by nominees for the beneficial owner, the full name and address of each beneficial owner must be provided. We do not recommend bearer shares because of the inherent security risks and the problems associated with shareholder actions. In addition, the Government's policy is that we must know our client. The identity of the beneficial owners is kept confidential.


If the company is to be limited by guarantee, we will need to know the names and addresses of the guarantors, the amount of each guarantee and whether or not it is to have a share capital and guarantors.

Restricted objects

Will the company have restricted objects? If so, what are they?

Directors and officers

Details of the names and addresses of the directors and officers are required. A minimum of one director is required but we would recommend that at least two directors be appointed. We would also recommend the appointment of a company secretary, but suggest that a sole director should not also be company secretary.

Registered office

The address of the registered office in the Cayman Islands is required. This facility can be provided by Walkers.


We need the names of the company's bankers if a bank account is to be opened in the Islands, and the signatories to operate the account. It should however be noted that most banks operating in the Cayman Islands will only accept new accounts upon receipt of bankers references on the principals involved and a receipt of a minimum initial deposit (normally at least US$500.00).


Do the directors of the company require an overseas seal? It should be noted that the company's common seal is normally kept at the company's registered office.


We need three professional references on each director, shareholder and beneficial owner of shares, from a firm of accountants or attorneys or from another reputable source.


Legal fees

Our legal fees for an exempted company include filing of standard Memorandum and Articles of Association, obtaining the Tax Undertaking, holding initial subscriber's shares and organising directors' meeting, issuing subscriber's share certificate and preparing registers.

Our legal fees for an LDC include work done as for an exempted company, together with Special Resolutions pursuant to s196 of the Companies Law (as amended) to continue the company in existence following transfer of the shares issued to the subscriber.

All other services in relation to the specific requirements of the client, including special provisions in the Memorandum or Articles of Association, powers of attorney and bank accounts, will be charged in accordance with our usual billing practices.

Initial registration fees

Miscellaneous disbursements

These usually amount to approximately US$320.00 for each type of company and include stamp duty, filing fees, seal, nameplate and notarial fees. We also advise clients to apply for a Tax Undertaking Certificate for a one-off fee of US$610.00. Whilst this is optional, it gives clients comfort that no law enacted in the Cayman Islands after the date of the Undertaking imposing tax on profits, income or capital gains will apply to the company or its operations, and nor will any tax in the nature of estate duty or inheritance tax apply on or in respect of the shares, debentures or other obligations of the company. Although no such taxes currently exist or, to our knowledge, are contemplated, our clients invariably apply for this Undertaking for the additional certainty it provides.


It is a statutory requirement that every Cayman Islands' company maintains a registered office in the Cayman Islands. Following the incorporation of a company, Walkers would be pleased to provide registered office facilities. Our fees for this service are pro-rated for each part of a calendar year and are set out below:

In addition, miscellaneous disbursements will be payable each year and additional administrative services will be charged on a time-spent basis.


The Cayman Islands have no exchange control laws. There is therefore no restriction on the movement of assets in or out of the Cayman Islands either by residents or non-residents of the Islands. Further, bank accounts may be kept in any currency available at the local banks, and the company's share capital may also be expressed in a currency suitable to the requirements of the beneficial owners.


Companies can be established in the Cayman Islands for any type of offshore business and subject to receiving the necessary work permits, offices may be set up in the Cayman Islands with local directors, management and staff.

Clients are advised to seek professional advice in their own country on the proposed operations of the company and the question of share ownership before proceeding.

Banks and trust companies

Banks and trust companies are regulated in the Cayman Islands by the Banks & Trust Companies Law (as amended). Many international banks and trust companies establish branches or subsidiaries in the Cayman Islands to handle their Euro-dollar transactions or to provide conventional banking or trust facilities for their offshore clients. In addition it is possible to establish private banks either to carry on offshore business generally or on a restricted basis for specified objects. All such operations are strictly controlled by the Cayman Islands Government and we refer you to our Memorandum on the subject for further information.

Insurance companies

Insurance companies are regulated in the Cayman Islands by the Insurance Law. Many insurance companies are established in the Cayman Islands, most of them being so-called "captive insurance companies". These are usually established by major international corporations as "in-house" insurance companies or by groups of individuals who are associated by a common interest to provide an insurance cover for risks of the parent or group. Some advantages of establishing a captive insurance company are:

  1. to insure risks that the normal insurance market will not readily accept;

  2. by controlling the membership of the group or the activities of the parent, to reduce the incidence of claims and thus reduce premium levels;

  3. to create a profit centre in an offshore environment which may result in tax savings; and

  4. to obtain direct access to the reinsurance market.

For further information on Insurance Companies please refer to our Memorandum on Insurance Companies in the Cayman Islands.

Trading companies

The Cayman company takes orders direct from the customer in the export market and has the goods shipped direct from the manufacturers. The difference between the purchase and sale price is then accumulated in the Cayman Islands and can be utilised as a fund which may be utilised to develop further markets or used for investment purposes. Trading companies can be utilised by either the buyers or sellers of the goods.

Investment companies

Funds accumulated through such companies can be invested or deposited in the Cayman Islands for local investment or investment abroad. Funds invested outside the Cayman Islands are subject to the tax legislation of the country of investment, usually in the form of withholding tax. However investments can be made on the Euro-dollar market, or in tax free bonds or in investments which have low income but high capital gains. Open ended investment companies (mutual funds) can be conveniently operated using Cayman Islands companies as they may issue shares which are redeemable out of profits or capital (or a combination of both) or may repurchase their own shares.

Shipping companies

The Cayman company can own and operate ships registered in the Cayman Islands. The only major requirements are that a survey be conducted by a surveyor licensed by the Department of Industry in the United Kingdom and that the company's principal place of business is within a British Commonwealth country. There is normally no need for the ship to come to the Cayman Islands since the survey prior to registration can usually be conducted in British and Commonwealth ports all over the world. The advantages of the Cayman registration are as follows:

  1. ships registered in the Cayman Islands are British ships;

  2. tonnage taxes are moderate; and

  3. the British flag has always been regarded as one of the world's most dependable marine registries.

For further information please refer to our Memorandum on Ship Registration in the Cayman Islands.

Foreign Companies

A company incorporated outside the Cayman Islands and wishing to carry on business in or from the Islands must register with the Registrar of Companies as a foreign company and must maintain a "place of business" and have a resident agent in the Cayman Islands. As in the case of a company incorporated in the Cayman Islands, this firm will be pleased to attend to the registration of the foreign company and provide the place of business and resident agent.

There are currently no Cayman Islands taxes applicable to the income or assets of foreign companies, although it is not possible to obtain a tax undertaking from the Government to this effect.

The documentation required to register a foreign company is as follows:

  1. a certified copy of the company's Charter and By-Laws, or equivalent, authenticated under the Public Seal of the country of incorporation, together with a certified translation if the document is not written in English;

  2. a certified copy of the company's Certificate of Incorporation, or equivalent document, authenticated and translated as above;

  3. a list of the directors of the company certified to be correct by the secretary of the company before a Notary Public; and

  4. the names and addresses of some one or more persons resident in the Islands who is authorised to accept service of process and any notice on behalf of this company. We would be pleased to provide this service. This appointment is normally evidenced by a letter of appointment from the company together with an acceptance from the person appointed.

Costs of registering a foreign company are set out in the table below:

Please note that we require advance payment of our incorporation fees and disbursements.

Cayman Islands

Wayne Panton, Partner


David Whittome, Partner


Heather Bestwick, Partner

British Virgin Islands

Jack Boldarin, Partner

Hong Kong

Philip Millward, Partner


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.

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.

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 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
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

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