Cayman Company Registration

Advantages of Cayman Company Registration

The Cayman Islands is the world's fourth largest offshore financial center, with its unique advantages to attract many companies around the world to register. Registering a Cayman company can enjoy the following advantages:

Facilitating cross-border operations

Facilitates enterprises to break through the limitations of their home countries, quickly go to the international market and carry out cross-border business

Avoiding trade barriers

Enterprises can avoid tariff barriers and export quota restrictions through offshore companies, reducing trade costs

Flexible mobilization of funds

Avoiding foreign exchange control, realizing the free dispatch of funds within the global scope, and assisting the capital operation of enterprises.

Relaxed legal environment

Based on the UK Business Companies Act, providing a stable legal framework to attract overseas business registration

Highly confidential

Information on company directors and members is strictly protected, and trade secrets are maintained to ensure that the secrets of business operations are not disclosed.

Efficient and convenient registration

Easy and inexpensive registration process, can be completed online, short registration period

Cayman Company Registration Requirements

The following conditions need to be met to register a Cayman company:

(1) Registered authorized capital: The standard authorized capital is US$50,000.

(2) Director Requirements: At least one director must be appointed, and any natural or legal person of any nationality and any place of residence may be a director at the same time; the information of the directors must be disclosed to the Registrar of Companies, but such information will not be made available for public inspection.

(3) Requirements for shareholders: At least one shareholder must be appointed, and natural or legal persons of any nationality and with any place of residence may act as both directors and shareholders; the information of shareholders is only required to be filed with the registered agent.

(4) Registered Agent: A Caymanian company or individual (with Caymanian residency status) must be appointed as the registered agent.

(5) Company name: The name of the company must end with "Limited" and must be checked without duplication before use.

(6) Registered capital: There is no minimum capital requirement and any currency may be used as the value of the share capital.

(7) Registered address: A registered address in the Cayman Islands is required.

(8) Scope of business: The scope of business of the company needs to be clarified.

CaymanCorporate and offshore structuring

Cayman companies are often used to set up structures to help enterprises realize curve listing. By registering a Cayman company, enterprises can bypass the relevant foreign investment company restrictions imposed by many countries and realize cross-border operations. In addition, a Cayman company can also be used as a main tool for offshore financing, which facilitates the listing or financing of enterprises abroad.

In the cross-border export e-commerce structure, the Cayman company is often used to build a structure to help enterprises realize the curve of listing. For example, a Hong Kong company is set up in the name of the Cayman company, and then a Wholly Foreign Owned Enterprise (WFOE) is set up in the name of the Hong Kong company in the Mainland, and then the domestic entity is controlled through the agreement of the WFOE company to complete the construction of the red chip structure.

Cayman companies also play an important role in a VIE structure, which is a series of written agreements between the WFOE, the domestic operating entity and the founders for the purpose of consolidating the accounting statements of the domestic operating entity by the Cayman company under offshore accounting standards and agreeing to control its interests.

Cayman Companyregistration fee

Cayman company registration fees vary depending on the registration conditions, registered capital, required documents and other factors. Generally speaking, the registration fee includes government registration fee, company secretary fee and so on. The specific fees need to be determined according to the actual situation of the enterprise and the quotation provided by the registered agent.

The Cayman Islands Companies Registry has indicated that the Caymanian annual fee will increase from January 1, 2025 onwards.According to an announcement from the Cayman Islands Department of Financial Services, effective January 1, 2025, the annual fee for corporations, limited liability companies, exempted limited partnerships and limited liability partnerships will increase by $150, an increase of approximately 13.91 TP3T.

The increase in annual fees means that the cost of Cayman company registration will also rise, and the overall cost of a typical Cayman company registration is more than 10,000 dollars.

Cayman company registration to set up offshore structure

Cayman companies are often used to set up structures to help enterprises realize curve listing. By registering a Cayman company, enterprises can bypass the relevant foreign investment company restrictions imposed by many countries and realize cross-border operations. In addition, a Cayman company can also be used as a main tool for offshore financing, which facilitates the listing or financing of enterprises abroad.

In the cross-border export e-commerce structure, the Cayman company is often used to build a structure to help enterprises realize the curve of listing. For example, a Hong Kong company is set up in the name of the Cayman company, and then a Wholly Foreign Owned Enterprise (WFOE) is set up in the name of the Hong Kong company in the Mainland, and then the domestic entity is controlled through the agreement of the WFOE company to complete the construction of the red chip structure.

Cayman companies also play an important role in a VIE structure, which is a series of written agreements between the WFOE, the domestic operating entity and the founders for the purpose of consolidating the accounting statements of the domestic operating entity by the Cayman company under offshore accounting standards and agreeing to control its interests.

Why choose Cayman for offshore listing

1. Global capital market access

Enterprises can choose to be listed and traded on world-renowned capital markets such as the NASDAQ Stock Exchange in the United States, the Growth Enterprise Market of the Stock Exchange of Hong Kong and the Singapore Stock Exchange. Many Chinese enterprises have successfully realized listing in Hong Kong and other places through companies registered in the Cayman Islands.

2、Tax planning advantages

The Cayman Islands, as the location of the headquarters of an offshore investment holding company, offers significant tax planning advantages. By registering a company in Cayman, enterprises can further invest in other offshore companies and realize tax deferral (for the company's shareholding). In addition, a Cayman company can be used as an important tool for dual-listing planning, helping enterprises to realize cross-listing in different capital markets, broaden financing channels and reduce financing costs.

3. Information confidentiality and compliance

A company registered in the Cayman Islands only needs to have one registered address, one director and one shareholder. At the same time, the information of the company's directors, shareholders and key management personnel is not disclosed to the public, which ensures the commercial confidentiality and privacy security of the enterprise. This is one of the important reasons why many enterprises choose Cayman companies for overseas listing.

4. Flexible approval system

Compared with the current situation of long review cycle and complicated approval procedures for domestic listing, realizing overseas listing by registering a Cayman company can, to a certain extent, reduce the difficulty of approval and improve the efficiency of listing, and provide enterprises with a more flexible and efficient platform for capital operation.

Cayman Islands companies required to make economic substance declarations

In December 2018, the Cayman Islands published the Cayman International Cooperation in Tax Matters (Economic Substance) Law, 2018 (the "Cayman Economic Substance Law"), which will come into force from 2019 onwards. Under the Cayman Economic Substance Law, a "relevant entity" incorporated in Cayman to carry out a "relevant activity" is required to satisfy the economic substance requirement. Failure to satisfy the economic substance requirement will risk fines and even deregistration.

In the case of a pure holding company, only the simplified Economic Substance Act requirements need to be met (i.e. as long as there are sufficient employees and office space in Cayman).

Registering a Cayman company requires information declarations, mainly for specific services, why the core business, the amount of income derived from the business, the physical office address in Cayman, the number of employees and other business-related information.

Failure of a Cayman company to comply with the economic substance requirement will result in a hefty fine by the Caymanian authorities of US$12,000 for the first offense and US$120,000 for the second offense, which will be ten times the amount of the first offense.If after two fines the Cayman company still does not meet the economic substance requirement, it will face compulsory deregistration.

Cayman Company Related Services