A recent case in the Grand Court of the Cayman Islands affirmed that a receiver can now be appointed over segregated portfolios. In a recent case in the Grand Court of the Cayman Islands it was affirmed that where one segregated portfolio of a...
Company Formation Services
Cayman Islands companies are incorporated electronically and can be registered using a fast and efficient same-day service.
The categories of companies that may be formed in the Cayman Islands include exempted companies, ordinary companies, limited liability companies (“LLCs”), limited duration companies, limited life companies, segregated portfolio companies and foundation companies:
- Exempted Companies have historically been the vehicle of choice for those wishing to conduct business outside of the Cayman Islands. An exempted company may obtain an undertaking from the Government that if direct taxation were ever to be introduced in the Cayman Islands, the company would be exempt for a period of 20 years. There are no restrictions on the residency or nationality of the directors or shareholders of an exempted company.
- Ordinary Companies are typically incorporated by those intending to conduct business within the Cayman Islands and there are specific requirements with regard to the need for local participation in such companies.
- Limited Liability Companies (“LLCs”) have been available in the Cayman Islands since 2016 and are designed to operate in substantially the same way as a Delaware limited liability company. An LLC may obtain an undertaking from the Government that if direct taxation were ever to be introduced in the Cayman Islands, the company would be exempt for a period of 50 years. There are no restrictions on the residency or nationality of the managers or members of an LLC.
- Limited Duration Companies and Limited Life Companies were created as an equivalent of the US limited liability company. However, as a result of changes in US tax rules, an exempted company is now preferred.
- Segregated Portfolio Companies provide a structure whereby separate segregated portfolios can be created within a single legal entity. The assets and liabilities of each segregated portfolio are ring fenced from the assets and liabilities of all other segregated portfolios in the same entity.
- Foundation Companies, unlike trusts or partnerships are like traditional companies in that they have separate legal personality, can hold assets and can sue or be sued in their own right. However, a key distinction is that Foundation Companies may not pay dividends or distributions to members and should use its assets in the furtherance of particular objects.
Particular advantages of registering a company or LLC in the Cayman Islands include, ease and speed of incorporation, a well-developed Companies Act based on English law (or, in the case of LLCs, on Delaware law), no taxation in the Cayman Islands on income or gains and, indeed, no direct taxation at all, an absence of exchange controls, a sophisticated professional infrastructure and a stable political regime.
A company or LLC incorporated or formed outside of the Cayman Islands may be registered to carry on business in the Cayman Islands, or it may transfer by way of continuation to the Cayman Islands, or it may merge with a Cayman Islands company
Partnership Formation Services
There are two principal types of partnership available for formation in the Cayman Islands.
The Partnership Act (as Revised) provides the framework for the registration of a traditional partnership, the partners of which have unlimited liability.
However, the most popular option available in the Cayman Islands for a partnership is the Exempted Limited Partnership which is governed by the provisions of The Exempted Limited Partnership Act (as Revised).
Some of the principal features of an Exempted Limited Partnership (“ELP”) are:-
- the ELP carries no separate legal personality and acts via a general partner;
- an ELP may obtain an undertaking from the Government that if direct taxation were ever to be introduced in the Cayman Islands, the ELP would be exempt for a period of 50 years;
- there are no restrictions on the residency or nationality of the limited partners of an ELP although the general partner must be a Cayman Islands entity or a foreign entity registered as such in the Cayman Islands; and
- the limited partners of an ELP have limited liability (save for limited circumstances).
The Cayman Islands has also passed The Limited Liability Partnerships Act (as Revised) and we are expecting Limited Liability Partnerships (“LLPs”).
Some of the principal features of a Cayman Islands LLP are:-
- LLPs have a separate legal personality and so there is no need for a general partner;
- an LLP is not, however, a body corporate and may therefore be considered ‘transparent’ for tax purposes;
- the partners of an LLP have limited liability (save for limited circumstances);
- an LLP may obtain an undertaking from the Government that if direct taxation were ever to be introduced in the Cayman Islands, the LLP would be exempt for a period of 50 years; and
- Cayman Islands ELPs may convert into LLPs and foreign LLPs may transfer by way of continuation into the Cayman Islands as LLPs.
See our Fee Schedule and Guidance Note on Setting Up a Cayman Islands Company
If you would like to find out more information on how we can help you with your company and partnership formation services, please email: firstname.lastname@example.org