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Cayman Offshore Company Formation and Management |
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Cayman Islands
Companies Law (2001 Revision)
CORPORATE SERVICES
Introduction
International Management Services Ltd., was licensed by the Cayman Government to provide company management services in 1974. Over the years, the firm has developed a full range of financial management and consultancy services.
With offices in central George Town, the capital of Grand Cayman, the firm provides professional services of value to those intending to do business in or from the Cayman Islands and specialises in the formation and management of Cayman Islands companies for overseas clients.
As business consultants, the firm can give information on all aspects of the Cayman Islands. In addition, the firm can arrange introductions to recommended banks, trust companies, real estate agents, attorneys and stockbrokers.
World Wide Services
International Management Services Ltd, can arrange services in many parts of the world. It may be that a client's requirements cannot be catered for in the Cayman Islands.
If this is so, the firm can advise upon other locations which may suit a clients needs and can arrange for services to be provided in those areas.
Such services could include, for example, the opening and maintenance of bank deposit accounts in Switzerland, the registration of companies in different jurisdictions and the provision of specialist consultancy and accountancy services in many countries through a network of associated offices and correspondents.
THE CAYMAN ISLANDS
The Cayman Islands, situated 480 miles south east of Miami, enjoy a semi tropical climate and contain a population of approximately 50,000 people of mixed origin.
The Islands are a British Crown Colony. Her Majesty the Queen is represented by a Governor who is Chairman of both the Legislative Assembly and the Executive Council.
Tax Free Status
There are no taxes whatsoever on income or profits, capital or wealth or capital gains. The revenues of the Islands are derived from indirect taxes such as import duties and stamp duty.
One of the most important features is that there never have been any taxes The absence of income tax is not, as it is some territories, an artificial absence created by legislation, but a natural one.
Companies incorporated in the Cayman Islands enjoy the same tax free status as individuals regardless of nationality of ownership. This absence of taxes, together with political and racial stability, has attracted the attention of investors seeking a tax neutral base for their operations.
The Government is aware of this attraction and has encouraged investment by the deliberate introduction of laws and development of the financial sector. Government policy is aimed at a continuation of the development of this aspect of the Islands' economy.
The official tender in the Cayman Islands is the Cayman Islands dollar, although American, British and Canadian currencies are honored and readily accepted. The official rate of exchange is CI$l.00 to US$1.20. There is no restriction on any company maintaining accounts in any currency either inside or outside the Islands.
Currently there are approximately 50,000 companies, 530 banks and 400 insurance companies of various categories registered or licensed in the Cayman Islands Since there is no income tax in the Cayman Islands their incomes are not subject to local taxation.
But there are other considerations quite apart from the absence of taxation; they operate from an environment in which there are no excessive restrictions on their freedom of trade or their ability to transact business in any part of the world.
Grand Cayman is served by various airlines including the national carrier Cayman Airways, British Airways, Northwest Airlines, America Airlines, USAir and Air Jamaica. Using DC9, DC10 and 727 jets these airlines provide frequent direct flights to the United States, the Caribbean and the United Kingdom.
Instantaneous Communications
The Cayman Islands postal services provide a quick and efficient service to the United States, Europe and other parts of the world including priority and first class mail. Federal Express and DHL courier services both have their own fully staffed offices in Grand Cayman and can provide overnight delivery to the world's financial centers.
These modern facilities enable International Management Services Ltd to service clients all over the world, facilitate international transactions and provide instant communication with international stock markets and brokers. In addition to telephone and fax communications E mail can be speedily and cost effectively routed to IMS over the Internet.
Today the Cayman Islands are recognised as an offshore11 financial center of major importance to international commerce.
SPECIAL FEATURES OF CAYMAN COMPANIES
Companies formed in the Cayman Islands are either ordinary or exempt.
Ordinary Companies
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.
Exempt Companies
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
COMPANY ACTIVITIES
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 purchasing goods or services from a supplier in one country and selling them on to customers in other countries, 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 offshore11 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.
Asset Protection
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:
* 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 received free of tax in the Cayman Island. 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.
REGULATED COMPANIES
Banks and Trust Companies
Under the Bank and Trust Companies Licensing law, no company may include the words "Bank" or "Trust" in its name or carry on banking or trust business, without obtaining a license from the Governor. The Law imposes certain conditions including the provision of a manager who is well versed in banking and financial matters and the setting aside of a fully paid up capital of US$500,000.
Insurance Companies The Insurance law of 1979 imposes similar restrictions on companies wishing to transact insurance business from the Islands including, inter alia, a minimum net worth of US$120,000 and audited accounts. The law has been largely responsible for establishing Cayman as an important base for captive insurance companies.
The regulatory departments of Government insist upon high standards, and do not necessarily limit themselves to the minimum requirements of the law. International Management Services Ltd can advise upon and arrange the formation and management of banks, trust companies and insurance companies in the Cayman Islands and elsewhere. (The present policy with regard to banks is that only applications from other banks already regulated in other approved countries will be accepted)
Click here for additional information on Offshore Captive Insurance Companies
Mutual Funds
The Mutual Funds Law provides for the registration of mutual funds of various categories. The law has given further impetus to Cayman registrations and at the end of 1999 there were over 2,000 mutual funds registered in the Islands.
Click here for additional information on Mutual Fund registration and management
Foreign Corporations
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$850.
COMPANY REGISTRATION AND MANAGEMENT
International Management Services Ltd. is able to arrange the registration of a Cayrnan company within 48 hours of receiving instructions and the company is able to transact business immediately thereafter. The inclusive registration service provides Memorandum and Articles of Association (Charter and Bylaws), company seal, nameplate, minute book, statutory records and deals with all incorporation formalities. The firm will provide a Full or partial management service according to the circumstances.
Our services include-
* Registered Office and Mailing Address
* Provision of Statutory and Accounting Records
* Provision of Directors and Officers
* Provisions of Meeting and Conference Rooms
* Provision of Fax and Telephone Services
* Writing up statutory records and keeping company in good standing
with the Cayman Islands Government
* Correspondence, Invoicing and Accounting Services
* All other facilities necessary for a company to carry on business
Full details of fees and costs for registration and management are contained in our current fee schedules Application forms for the formation and management of Cayman companies may be obtained from our offices in Grand Cayman.
INVESTMENTS AND CONFIDENTIALITY
Investment Opportunities
The main function of International Management Services Ltd. is to provide company formation and administration services and corporate and asset management for a large number of client companies registered in the Cayrnan Islands and elsewhere following the advice of financial advisers selected by the corporations themselves. In those cases, where clients seek investment advice concerning precious metals, precious stones, commodities, securities and real estate, the firm retains the services of qualified professionals close to the world markets to give the best advice according to the client's circumstances.
Competitive Interest Rates
For clients interested in purchasing certificates of deposit, the firm can arrange such investment through the Cayman branches of a number of the World's largest banks. Very competitive tax free interest rates are offered and deposits are fully secured by the resources of the parents located in financial centers such as London, Switzerland and New York.
Confidentiality
Confidentiality of business transactions is strictly observed in the Cayman Islands and is further enhanced by the Confidential Relationship (Preservation Law) enacted in 1976. These laws are designed to protect bona fide business dealings and impose strict penalties and sentences on those disclosing such information.
It is emphasised that Cayman's confidentiality laws are not designed to accommodate criminal activity. In order to discourage the abuse of Cayman's confidentiality laws to facilitate criminal activity the Cayman Islands Government has negotiated information treaties with foreign governments in relation to matters which the Cayman Courts view as criminal according to Cayman law particularly with regard to matters concerning narcotics and money laundering.
There are no taxes in the Cayman Islands, and exchanges of information involving the tax authorities of foreign countries are excluded from the above treaties.
However certain countries impose reporting requirements on their citizens who own shares in off-shore companies. For this reason beneficial owners of Cayman companies are advised to take professional advice in their own countries concerning their personal reporting requirements and tax liability.
Phone: 345 949 4244
Fax: 345 949 8635
E-mail at: IMS@candw.ky