Cayman Islands Overview

Cayman Islands Overview

Background The Cayman Islands consist of three small islands—Grand Cayman, Cayman Brac, and Little Cayman—located approximately 480 miles south of Miami and just north of Jamaica in the Caribbean Sea. This English-speaking British Crown colony has a diverse population comprising approximately 20% Caucasian, 25% Black, and 55% of mixed races, making it a melting pot of cultures. The islands are particularly convenient for U.S. and Canadian businessmen due to their proximity to North America. The main economic pillars include tourism, financial services, boat building, and fishing. The Cayman Islands host over 500,000 tourists annually, predominantly from the USA, and are home to more than 500 bank and trust companies, along with over 300 registered insurance companies.

Legal System The legal framework in the Cayman Islands is based on common law principles, akin to the UK system, supplemented by local statutes that cater to the business community's needs. The judicial system is structured into four levels: the Summary Court, the Grand Court, the Court of Appeal, and the Privy Council in London, which serves as the final appellate court.

Currency and Financial Freedom The local currency, the Cayman dollar, is pegged against the pound sterling and valued at approximately USD1.20. Notably, there are no exchange controls, allowing free movement of other currencies within the Cayman financial system.

Confidentiality and Privacy The Cayman Islands offer registration as an exempted company for businesses operating primarily outside the jurisdiction, ensuring confidentiality. Shareholder registers of exempted companies are private, enhancing privacy. Although bearer shares are permissible, many opt for nominee shareholders to maintain anonymity. The Confidentiality Relationship (Preservation) Law imposes strict penalties for breaches, securing client-professional confidentiality.

Taxation The Cayman Islands are renowned as a zero-tax haven, with no direct taxes imposed on individuals or corporations. Exempted companies can secure government guarantees against the imposition of any future taxes for up to 30 years, while exempted trusts are eligible for these guarantees for up to 100 years. This absence of taxation has positioned the Caymans alongside other no-tax jurisdictions like the Bahamas and Bermuda, attracting significant global financial activity.

Legislation and Business Structure Foreign investors gravitate towards forming exempted companies in the Caymans due to the privacy of shareholder registers, which can be maintained inside or outside the islands. In contrast, the shareholder registers of ordinary companies are public. This legislative environment supports the Cayman Islands' status as a top offshore financial center, appealing to investors seeking efficient, confidential, and flexible business operations.

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