Introduction to the Cayman Islands

Located 180 miles south of Florida, the Cayman Islands are made up of three Islands: Grand Cayman, Cayman Brac and Little Cayman. These Islands comprise a land area of 100 square miles with Grand Cayman being the largest. The Cayman Islands are tempered by trade winds that maintain a consistently comfortable temperature in the 80 degrees Fahrenheit (27 degrees Centigrade) range. The population is 58,000 with the majority of these people living in Grand Cayman. The local currency is the Cayman dollar, which is fixed at 1.2 US dollars; there is no income tax.

Advantages of incorporating in Cayman

The Cayman Islands has a well-regulated and internationally respected, tax-neutral, offshore business environment that is both dynamic and responsive — there are over 90,000 active registered companies here.

As a result, Cayman is booming. In July 2019 the Organisation for Economic Co-operation and Development deemed Cayman’s tax regime as ‘not harmful’ to other countries. With a well-developed common law system based on English law, and with a proliferation of world-class corporate service companies, many companies have chosen to incorporate in Cayman.

Key reasons companies choose to start up operations include the following:

  • Tax neutrality: for exempt companies in the Cayman Islands, there is no corporation tax, capital gains tax or withholding tax
  • Multi-purpose: companies established offshore can be used for multiple business purposes (e.g. international finance, shipping, trading, insurance, funds, real estate holding)
  • Asset protection: a Cayman Islands company can be used as a vehicle for asset protection and management as well as for Intellectual Property rights holding
  • Ease of incorporation: only one shareholder and one director are required (they can be the same person) with no local residency requirement
  • Simplified reporting: since there are no taxes, there is a reduced requirement for annual reporting requirements
  • Professional support: ready availability of investment, legal and other advice and expert management services

Available types of business entity

  • Exempted company: this form is suitable for international trade. It cannot conduct business within the Islands and/or with Cayman residents. At the time of writing, nearly 85% of active companies in Cayman were of this type
  • Non-resident company: an alternative to the exempted format with similar requirements for incorporation
  • Exempted limited partnership: this option requires one general partner (must be a Cayman resident) and one limited partner
  • Excluded person financial company: similar to exempted companies, these entities can include a company that manages securities for one or more members of a group

The exempted company, the non-resident company, and the excluded financial person company can be incorporated with a minimum of one director and one shareholder. At the time of writing, the identities of the beneficial owners are protected.

Costs of company formation

There are no formal requirements for a minimum authorized capital in the Cayman Islands. While in most jurisdictions investors are required to deposit a minimum amount in a bank account, for the purpose of incorporation, this is not mandatory on the Island. In practice, investors can choose to incorporate the company with a minimum share capital of US$1.

Fees for company formation vary depending on the authorized capital for the company. For example:

  • For an exempt company with share capital of up to US$51,219 (CI$42,000), government registration fees are US$720 (CI$600) with annual fees of US$840 (CI$700)

The above fees can be subject to change. Learn more from the Cayman Islands General Registry.

Regulatory oversight

Aside from its goal of maintaining a stable local currency, the Cayman Islands Monetary Authority protects and enhances the reputation of the Cayman Islands as an International Financial Centre by supervising and regulating it in accordance with applicable local and international standards.

The Ministry of Financial Services is responsible for legislation and policy development relating to the financial services industry in Cayman and engagement with international tax, transparency and regulatory initiatives.

— Listen to our podcast with the CEO of Cayman Finance —


The information provided above is for general introductory purposes only. If you are interested in setting up a company in the Cayman Islands, be sure to take appropriate professional advice. If you are setting up a business and would like assistance in staffing up your team, book a Discovery Call with us today.