Company and Jurisdictions
|The Companies Law (2002 Revision).||USD 50,000 would generally be used, as this is the maximum level for which minimum Government fees apply.|
|Annual government fees:||Corporate Taxation:|
|USD 575 for companies with an authorised capital up to USD 50,000; USD 806 for companies with an authorised capital up to USD 1 million; USD 1,690 for companies with an authorised capital up to USD 2 million; and USD 2,402 for companies with an authorised capital exceeding USD 2 million.||Zero|
|Time to incorporate:||Ready-made companies:|
|3 to 5 days.||Yes.|
|Minimum members:||Registered office required:|
|One, individual or corporate.||Yes, must be maintained in the Cayman Islands at the address of a licensed management company or law firm.|
|Local registered agent:||Minimum number directors:|
|Yes.||One, individual or corporate. A register of directors must be filed with the Registrar but is not open to public inspection.|
|Officer to be locally resident:||AGM required:|
|Annual return required:||Financial statements to be prepared and/or audited:|
|Each company must file an annual return, which takes the form of a simple declaration. .||No.|
|Balance sheets to be filed:||Share register required:|
|No.||Yes, at registered office|
|To be filed with Registrar:||Open to public inspection:|
|No.||No, but open to other members.|
|Exchange controls:||Redomiciliation permitted:|
|None.||Yes, in and out.|
|Language of incorporation:||Confidentiality:|
|English.||The Confidential Relationships (Preservation) Law makes it a criminal offence to divulge confidential information or to willfully obtain or attempt to obtain confidential information relating to a Cayman Island company. However this confidentiality is being eroded by subsequent legislation and mutual assistance treaties under which there will be disclosure of information in criminal offences, including tax offences.|
|Bearer shares permitted:|
|Yes, but must be immobilised by lodging with an authorised custodian within the islands, which brings additional costs.|
- 540 banks are represented on the islands.
- Top legal services.
- Premier hedge fund jurisdiction.
OECD Harmful Tax Practices
The Cayman Islands was one of six jurisdictions that gave an advance commitment to the OECD, on 18 May 2000, to exchange information with overseas authorities in criminal tax matters by 31 December 2003 and in civil tax matters by 31 December 2005.
Tax Information Exchange Agreement (TIEA)
The Cayman Islands signed a bilateral TIEA with the USA that came into force on 1 January 2004. The agreement covers information relating to “the administration and enforcement of the domestic laws of the parties concerning the taxes and the tax matters covered by this Agreement, including information that may be relevant to the determination, assessment, verification, enforcement or collection of tax claims with respect to persons subject to such taxes, or to the investigation or prosecution of criminal tax evasion in relation to such persons.
After the Cayman Islands was forced to accept 'information sharing' under the EU's Savings Tax Directive in 2004, the UK agreed to move discussion of a TIEA between the UK and the Cayman Islands to the head of the queue.
EU Savings Tax Directive
On 4 February 2004, the Cayman Islands Government announced that, after extensive consultation with its financial services industry, it has agreed to implement with the EU Members exchange of information measures consistent with the EU Savings Directive with effect from 1 July 2005.
Financial Action Task Force (FATF)
The Cayman Islands was one of 15 countries or territories identified by the FATF as Non-Cooperative (NCCT) in June 2000, after it found serious deficiencies in its anti-money laundering legislation. The Cayman Islands was removed from the NCCT list in June 2001 after the government introduced four bills aimed at tightening up supervisory procedures and information exchange arrangements.
In addition, the Cayman Islands is a member of the Caribbean Financial Action Task Force (CFATF) and the Egmont Group.
Mutual Legal Assistance Treaties (MLATs)
The MLAT Law gives effect in the Cayman Islands to the Mutual Legal Assistance Treaty agreed between the UK, on behalf of the Cayman Islands, and the USA in 1986. The objective of the MLAT Treaty is to enable the provision of mutual legal assistance between the USA and the Cayman Islands for the investigation, prosecution and suppression of criminal offences.
Not having any taxes other than customs duties and stamp duty, the Cayman Islands has not entered into any tax treaties with other countries.
|Full Country Name:||
|Dependency status:||UK Overseas Territory|
260 sq km (100 sq miles)
George Town (Grand Cayman)
Mixed 40%, European 20%, Afro-Caribbean 20%, expatriates of various ethnic groups 20%
|Currency:||Caymanian Dollar (KYD) – approx. 0.82 per US Dollar (2001)|
parliamentary British overseas territory with internal self-government
|Legal system:||British common law and local statutes British common law and local statutes|
|Head of State:||
HM Queen Elizabeth II
The three Cayman Islands are situated 268km (180 miles) northwest of Jamaica in the Caribbean Sea and 150 miles south of Cuba. Grand Cayman, which is much larger than the others, lies 128km (80 miles) to the west of Cayman Brac and Little Cayman, which are separated from each other by a channel 8km (5 miles) wide. Grand Cayman is approximately 22 miles long with an average width of 4 miles. About half of Grand Cayman's area is wetland. Cayman Brac is about 12 miles long with an average width of one and a quarter miles. Little Cayman, a low-lying island, is approximately 10 miles long with an average width of little more than a mile. About 94% of the population lives on Grand Cayman, with around 1,822 people residing on Cayman Brac and some 115 on Little Cayman. Offshore reefs and a mangrove fringe surround most of the islands' coasts.
In 1503 Christopher Columbus passing by the islands noted the great abundance of giant green turtles. The Islands appeared to be uninhabited. For the next 200 years they were visited by many ships for revictualling, and small groups of pirates and shipwrecked sailors formed temporary settlements. No country attempted to colonise the islands before 1670, when Spain ceded the Cayman Islands and Jamaica to Britain by the Treaty of Madrid. After 1863 the Caymans formally became a dependency of Jamaica and the legislature of Jamaica had the final say over the locally passed laws of the islands. Cayman Brac and Little Cayman were not settled until 1833, and it was not until 1887 that a formal administrative connection between them and Grand Cayman was achieved. In 1959 the islands ceased to be a dependency of Jamaica and became a unit territory within the Federation of the West Indies. When the Federation was dissolved, in 1962, the Cayman Islands, chose to remain under the British Crown, thereupon received a revised constitution, which in 1972 was modified to allow for directly responsible government. This was further modified in March 1994. A wider constitutional review, started in 2001, was put on hold early in 2004 pending elections in November.
Government and Politics
|Head of State:||Queen Elizabeth II (since 6 February 1952); Governor Bruce Dinwiddy (since 29 May 2002)|
|Head of Government:||
Leader of Government Business W. McKeeva Bush (since December 2001)
|Deputy Prime Minister:||-|
|Cabinet:||Executive Council (three members appointed by the Governor, four members elected by the Legislative Assembly)|
|Elections:||none; the Monarch is hereditary; the Governor is appointed by the Monarch; following legislative elections, the leader of the majority party or coalition is appointed by the Governor as Leader of Government Business|
Unicameral Legislative Assembly (18 seats, three appointed members from the Executive Council and 15 elected by popular vote; members serve four-year terms)
Elections:last held 8 November 2000 (next to be held 17 May 2005; delayed from 17 November 2004 as a result of Hurricane Ivan)
Election results: seats by party - NDP 8, VIP 5
Summary Court; Grand Court; Cayman Islands Court of Appeal
The four-tiered judicial system is based on English common law and colonial and local statutes. The Cayman Islands Court of Appeal is the highest court on the islands, but Her Majesty’s Privy Council sitting in London may hear a final appeal.
Political parties and leaders
No national parties (loose groupings of political organisations) were formed for the 2000 elections; United Democratic Party or UDP (leader McKeeva Bush); People's Progressive Movement or PPM (leader Kurt Tibbetts)Unlike other Caribbean Overseas Territories there is no Chief Minister, but a Leader of Government Business. In the last elections, Truman Bodden, the then Leader of Government Business and most of his administration lost their seats and so brought about a completely new Executive Council (ExCo). In November 2001, a new political party United Democratic Party (UDP) was formed from 10 of the 15 members of the Legislative Assembly. There was a successful vote of no confidence in Kurt Tibbetts, Leader of Government Business. This resulted in him and Edna Moyle, being replaced in the Executive Council. McKeeva Bush was voted in as the new Leader of Government Business and the UDP (United Democratic Party) was formed. Following the Constitutional debate in the legislative assembly in June 2002, the opposition formed their own party, the People's Progressive Movement (PPM)
Basic economic facts
GDP (2004 est.): $1.391 billion
Growth rate (2002 est.): 1.7%
Per capita GDP (2004 est.): $32,300
Main Industries: Tourism, offshore finance
The advent of modern transportation and telecommunications in the 1950s led to the emergence of what are now considered the Cayman Islands' "twin pillars" of economic development: international finance and tourism. The Caymanians enjoy one of the highest outputs per capita and one of the highest standards of living in the world.
For foreign investors and businesses, the Cayman Islands' main appeal as a financial centre is the absence of all major direct taxes, free capital movement, a minimum of government regulations, and a well-developed financial infrastructure. In 2002, there were more than 40,000 companies registered in the Cayman Islands. The Cayman Islands also has over 500 banks and trust companies, 3000 mutual funds, and 500 captive insurance companies that are licensed. Forty-three of the world’s largest banks are present in the Cayman Islands. The Cayman Islands is the world's fifth-largest financial centre. A stock exchange was opened in 1997.
Money laundering regulations that entered into force in late 2000 specify record keeping and customer identification requirements for financial institutions and certain financial services providers; the regulations specifically cover individuals who establish a new business relationship, engage in one-time transactions over Cayman Islands (CI) $15,000 (approximately US$18,000), or who may be engaging in money laundering. Amendments to the Proceeds of Criminal Conduct Law (PCCL) make failure to report a suspicious transaction a criminal offense that could result in fines or imprisonment. A provision of the Banks and Trust Companies Law (2001 Revisions) grants the Cayman Islands Monetary Authority (CIMA) access to audited account information from licensees who are incorporated under the Companies Law (2001 Second Revision) and the power to request "any information" from "any person" when there are "reasonable grounds to believe" that that person is carrying on a banking or trust business in contravention of the licensing provisions of the law.
The Monetary Authority Law enacted in December 2002 grants the CIMA independence with respect to licensing and enforcement powers over financial institutions. Unlike earlier versions of the Monetary Authority Law, this one contains no requirement that the CIMA obtain a court order before accessing account ownership and identification information. Amendments to the Companies Management Law (2001 Revision) expand regulatory supervision and licensing to management companies that were previously exempted, while the Companies Law (2001 Second Revision) institutes a custodial system in order to immobilize bearer shares.
Tourism is also a mainstay, accounting for about 70% of GDP and 75% of foreign currency earnings. The tourist industry is aimed at the luxury market and caters mainly to visitors from North America. Total tourist arrivals exceeded 1.2 million in 1997, with 600,000 from the US.
Despite close historic and political links to the UK and Jamaica, geography and the rise of tourism and international finance in the Cayman Islands' economy has made the USA its most important foreign economic partner. Some 10,000 Americans are resident there.
The UK is responsible for Cayman Islands' external relations, defence and internal security. However important bilateral issues are often resolved by negotiations between the Cayman Government and foreign governments, including the US. Cayman Islands enjoy a close relationship with the other Caribbean Overseas Territories. The Cayman Islands has recently become an associate member of CARICOM.