Cayman Islands: Benefitting from its flexibility and tax-neutral status

The Cayman Islands is an attractive jurisdiction for the registration and maintenance of corporate entities as part of a global corporate structure. To take advantage of this regime, existing companies domiciled in other jurisdictions will often migrate to the Cayman Islands in order to benefit from its inherent flexibility and tax-neutral status.

The Cayman Islands Companies Act permits a body corporate incorporated, registered or existing with limited liability and a share capital under the laws of any jurisdiction outside the Cayman Islands (the Registrant) to register by way of continuation as an exempted company limited by shares to the Cayman Islands.

For companies interested in migrating to the Cayman Islands in the context of a larger transaction, the process, generally, is straightforward, with the following being the principal pre-conditions to a Registrant's successful migration. The Registrant must:

• be incorporated or registered in a jurisdiction whose laws do not prohibit the migration of the Registrant
• deliver certain key constitutional documents to the Cayman Islands Registrar, such as its incorporation certificate; its charter or articles of association; a list of its directors; and a certificate of good standing (or the equivalent in its jurisdiction
• deliver a notice to the Registrar of the Registrant's registered office in the Cayman Islands, eg, Walkers Corporate Limited
• pay a fee to the Registrar, which differs depending on the Registrant's authorised share capital and
• file with the Registrar a director declaration confirming that, among other things, the Registrant is able to pay its debts, no receiver or administrator has been appointed or petition to wind has been filed and its operations will be conducted mainly outside the Cayman Islands.

Upon migration to the Cayman Islands, a certificate of registration by way of continuation as an exempted company will be issued to the Registrant and the details of the Registrant entered into the Register of Companies.

From the date of registration in the Cayman Islands, the Registrant shall continue as a body corporate for all purposes as if incorporated and registered as an exempted company under and subject to the Companies Act.

A similar regime exists for the migration of limited liability companies to the Cayman Islands.

Find out more about migrating your company to the Cayman Islands by contacting the author.

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*Sam Francis is an associate based in the Cayman Island offices of international law firm Walkers. You may reach him via Sam.Francis@walkersglobal.com.