STATUTORY REQUIREMENTS OF A CAYMAN ISLANDS COMPANY

Restrictions on Trading.  Cannot trade within the Cayman Islands, own real estate in the Cayman Islands. Cannot undertake the business of banking, insurance business or mutual fund business unless licensed. Cannot solicit funds from the public.

Powers of Company. A Cayman Islands Exempt company has all the powers of a natural person.

Language of Legislation and Corporate Documents. English. An Arabic language facility was enabled in 2007.

Registered Office Required.  Yes, must be maintained in the Cayman Islands.

Name Restrictions.  Bank, insurance, assurance, reinsurance, trust, municipal, charter, co-operative, their foreign language equivalents or any name that, in the opinion of the Registrar, would suggest a connection with a Royal family or Government authority.

Language of Name.  Names can be expressed in any language using the Latin alphabet, Chinese or Arabic, if the Registrar of Company receives a translation thereof. The corporate documents will however be in English.

Names Requiring Consent or License.  Bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, asset management, trust, trustees or their foreign language equivalent.

Suffixes to Denote Limited Liability.  There is no requirement to utilise a suffix to denote limited liability, although normally companies are incorporated to include the suffixes Limited, Incorporated, Corporation or their abbreviations.

Disclosure of Beneficial Ownership to Authorities.  No requirement.

Authorised and Issued Share Capital.   The minimum is US$1, but it is normal to incorporate with an authorised share capital of US$50,000; divided in to 50,000 common voting shares of US$1, this being the maximum for the minimum capital duty payable to the Registrar of Companies.

The minimum issued share capital is one share of no par value or one share of part value.

Classes of Shares Permitted.  Registered shares of par or no par value, preference shares, redeemable shares and voting or non-voting shares. Bearer Shares may be issued but must be held by an authorised depository.

Directors.  The minimum number of directors is one. The directors may be natural persons or bodies corporate. The directors may be of any nationality, and need not be resident in the Cayman Islands.

Company Secretary.  The Cayman Islands Companies Ordinance does not make any specific reference to a requirement for a company secretary. However, it is customary to appoint one, who may be either a natural person or a body corporate. NB Effective January 18th 2013 the penalty under Section 56 for failing to file a notice of change in a director or officer has increased to an initial fine of $1,220 plus $122 a day extra for each director which is past due 90 days up to a maximum of 5 days ie $610.

Shareholders.  The minimum number of shareholders is one.

Taxation.  There is no form of taxation in the Cayman Islands relating to individuals, corporations or trusts.

Double Taxation Agreements.  The Cayman Islands has no double tax agreements.

Financial Statements Required.  Companies (Amendment) Law 2010 states that “Every company shall cause to be kept proper books of account including where applicable, material underlying documentation including contracts and invoices. Such documentation must be retained for a minimum period of five years from the date on which they are prepared”. Failure to retain such records shall be subject to a penalty of $5,000.

Unregulated exempt companies do not need to file accounts.

Economic Substance Requirements (ESRs).  Please refer to Frequently Asked Question.

Procedure to Incorporate.  For Exempt Companies by submission of the Memorandum and Articles of Association and registration fee to the Registrar of Companies, together with a sworn statement declaring that the business activities of the proposed company will be undertaken mainly outside the Cayman Islands. The names and addresses of the proposed first directors must be disclosed to the Registrar.

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error omission.