Corporate tax in Cayman Islands

Summary

Corporate Income Tax Rate (%) 0
Capital Gains Tax Rate (%) 0
Branch Tax Rate (%) 0
Withholding Tax (%)
Dividends 0
Interest 0
Royalties from Patents, Know-how, etc. 0
Branch Remittance Tax 0

Taxes on corporate income and gains

The Cayman Islands does not impose taxes on income, profits, wealth or capital gains.

Corporate license fees

Ordinary resident company. An ordinary resident company may transact foreign and domestic business from within the Cayman Islands. A Trade and Business License is required if business is to be conducted within the Cayman Islands unless the business is exempted (see Section D). If Caymanians or persons with Cayman status do not own at least 60% of the issued share capital, hold 60% of board positions or otherwise control such a company, the company must also obtain a Local Companies (Control) Law License before it can do business in the Cayman Islands, unless the business is exempt from this requirement.

Incorporation fees range from a minimum of KYD300 to a maximum of KYD500. Annual fees range from a minimum of KYD300 to a maximum of KYD500. The fees are based on authorized capital.

Ordinary nonresident company. An ordinary nonresident com pany is similar to a resident company, but it is not permitted to con duct business within the Cayman Islands. However, it may transact within the Islands all matters necessary to conduct its business outside the Islands; for example, it can negotiate contracts or open bank accounts.

Incorporation fees range from a minimum of KYD575 to a maximum of KYD815. Annual fees range from a minimum of KYD675 to a maximum of KYD915. The fees are based on authorized capital.

Exempted company. An exempted company is the most common form of company used by the offshore investor. An exempted company, similar to an ordinary nonresident company, may not conduct business with in the Cayman Islands, but may transact from within the Islands all the matters necessary to conduct its business outside the Islands. An exempted company has certain advantages over an ordinary resident or nonresident company, including the availability of a Tax Exemption Certificate, which make the exempted company attractive to an offshore investor. A Tax Exemption Certificate provides that no law enacted in the Cayman Islands imposing any tax on income, profits, capital gains or appreciations will apply to the exempted company and that no such tax, estate duty or inheritance tax will be payable on or with respect to the shares, debentures or other obligations (or the income deriv ed from such instruments) of the exempted com­pany. The exemptions provided in the certificate are for a renew­able 20-year period.

Incorporation fees range from a minimum of KYD600 to a maxi­mum of KYD2,468. Annual fees range from a minimum of KYD700 to a maximum of KYD2,568. The minimum fee applies to companies with authorized capital of up to KYD42,000; the fee increases on a sliding scale for authorized capital in excess of this amount until it reaches the maximum of KYD2,568, which applies to companies with authorized capital exceeding KYD1,640,000.

An exempted company, through its memorandum and articles of association, may be established as a company limited by shares, a company limited by guarantee or a limited duration company (LDC). LDCs may be treated by the authorities of the United States and other jurisdictions as partnerships for tax and other purposes. An ex empted company is classified as an LDC if its corporate existence terminates on the happening of one or more specified events and if it has a maximum life of 30 years. If a company limited by shares has more than one share class, it may be established on the basis that some of its classes will have lim­ited liability and some will have unlimited liability. LDCs must pay a fee of KYD200 on registration in addition to the regular fees described above.

Miscellaneous matters

Foreign-exchange controls. The currency of the Cayman Islands is the Cayman Islands dollar (KYD). The exchange rate of the US dollar against the Cayman Islands dollar is fixed at USD1.2 = KYD1.

The Cayman Islands has no foreign-currency exchange control regulations.

Business licenses. Unless exempted, every person or company carrying on a trade or business must have an annual license for each place where such trade or business is carried on. The amount of the fee depends on the type and location of the business, as well as on the number and type of employees.

Companies that engage in certain types of business, such as bank­ing and insurance, may be required to be licensed or registered under relevant laws. These laws may expressly eliminate the re­quirement that a company obtain a Trade or Business License or a Local Companies (Control) Law License.

The following are the annual license renewal fees payable by insurance companies and banks registered in the Cayman Islands.

Insurance Companies (KYD)
Class A (locally incorporated) 75000
Class A (approved external insurer) 75000
Class B(I) (at least 95% of the net premiums written originate from the insurer’s related business) 8500
Class B(II) (over 50% of the net premiums written originate from the insurer’s related business) 9500
Class B(III) (50% or less of the net premiums written originate from the insurer’s related business) 10500

 

  Banking and trust companies (KYD)
Class A (unrestricted) 1,000,000
Class A (restricted) 300,000 or 350,000
Class B (unrestricted) 60,000 to 100,000
Class B (restricted) 37,000 or 40,000

 

The fees for Class B banking and trust licenses depend on the corporate structure of the relevant bank (the structures are branch­es, subsidiaries and private/affiliated companies) and slightly high­er fees may be payable on the application and grant of the license. Restricted trust companies must pay an annual fee of KYD7,000 for a restricted trust license alone.

Mutual funds registered or licensed under the Mutual Funds Law must pay an annual license fee of KYD3,500. Mutual fund admin­istrators must pay the following license renewal fees:

  • Restricted license: KYD7,000
  • Unrestricted license: KYD30,000 or KYD35,000 (depending on the number of funds under administration)

Company managers and corporate service providers licensed un­der the Companies Management Law must pay an annual license fee. For managers, the annual license fee ranges from KYD750 to KYD20,000 (depending on the number of companies under man­agement), plus KYD150 per managed company. For corporate service providers, the annual license fee ranges from KYD500 to KYD10,000, plus KYD75 per company.

Stamp duties. Stamp duties are charged on transfers of real prop­erty, leases, mortgages and the execution of various other doc­uments within the Cayman Islands. Transfer duty is payable on transfers of shares in Cayman Islands companies that hold real property in the Cayman Islands, subject to certain exemptions.

Tax treaties

As of October 2015, the Cayman Islands has entered into bilater­al tax information arrangements with Argentina, Aruba, Australia, Belgium, Brazil, Canada, China, Curaçao, the Czech Republic, Denmark, the Faroe Islands, Finland, France, Germany, Green­land, Guernsey, Iceland, India, Ireland, Isle of Man, Italy, Japan, Malta, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Qatar, Seychelles, Sint Maarten, South Africa, Sweden, the United Kingdom and the United States. It has also agreed to share information under the unilateral mechanism with Austria, Belgium, the Czech Republic, Germany, Ireland, Japan, Luxem­bourg, the Netherlands, the Slovak Republic, South Africa, the United Kingdom and Switzerland.

The Cayman Islands has also entered into a double tax treaty with the United Kingdom.

On 5 November 2013, the Cayman Islands and the United King­dom signed an intergovernmental agreement (IGA) to enable the exchange of information for tax purposes, including on an auto­matic basis.

On 29 November 2013, the Cayman Islands and the United States signed and released a Model 1 IGA for the implementation of the US Foreign Account Tax Compliance Act.