Ordinary companies are formed in much the same way as they are in England. A Memorandum of Association (Charter) must be filed with the Registrar of Companies, stating the name of the registered office, the objectives and the authorised share capital. The company may either draw up its own Articles of Association (Bylaws) or use the standard Table A”, and may operate with only one shareholder. An ordinary company must have at least one director and is required to hold at least one shareholder meeting every year. It must also file an annual report with the Registrar of Companies, listing the shareholders and officers.


An exempt company is formed in the same way, except that a director must make a declaration to the effect that the company will not trade within the Cayman Islands for any reason other than the maintenance of an administrative office or local bank and brokerage accounts.

An exempt company enjoys the following advantages:

  • It may obtain a guarantee from Government exempting it from any taxes which could be introduced by future legislation for a period of up to 20 years
  • It need not hold any shareholder’ meetings
  • It need not include the word limited or Ltd in its name


Many of the companies incorporated in the Cayman Islands are investment holding or dealing companies holding quoted or unquoted investments throughout the world. Some act as sales distribution companies invoicing goods from one country to another, either on their own behalf, or as brokers on behalf of others.

Other companies have been incorporated as subsidiaries on behalf of foreign parent companies for specific tasks. Yet others, particularly in relation to the movie, record and publishing industries, are incorporated to exploit copyrights, performing rights or patents. Professionals incorporate companies to provide management and consultancy services in foreign countries. Of substantial importance is the formation and licensing of banks to transact Eurocurrency business without restriction, and the formation of insurance companies to act as captive insurance companies or for the reinsurance of foreign risks.

Some companies are formed to operate offshore mutual funds, pool investors funds and spread risk. In addition, the use of an open ended multi-shareholder investment company in this way can avoid the controlled foreign corporation rules of many countries and allow capital gains to be accumulated tax free. Many companies are also formed to avoid foreign estate taxes on foreign investments.


Just about any type of income earning asset can be acquired by a Cayman corporation with immediate advantages. The following are examples of income earning assets which can be held by a Cayman Corporation thus avoiding heavy taxation in other territories.

  • Fixed Term Deposits
  • Listed Stocks and Securities
  • Stock in Private Companies
  • Real Estate and Commissions
  • Patents, Royalty Agreements and Contract Rights
  • Sea Going Vessels and Aircraft

Once these assets are acquired by a Cayman corporation, income received from them is usually received tax-free. Also, since the corporation is a continuing entity, the assets transferred to the Cayman corporation would not be subject to death duties.
Beneficial owners of Cayman companies are, however, advised to take legal advice in their own countries concerning their personal reporting requirements and liability.


A foreign corporation may register an office to carry on business from the Cayman Islands. The initial Government fees are CI$850 and the subsequent fees are CI$500.

Note: The article above may not contain current information.