The Cayman Islands has long been a heavyweight in the offshore world — and for good reason. It offers zero corporate tax, strong asset protection laws, a stable political environment, and one of the most respected financial sectors in the world.
But setting up a business here isn’t just for hedge funds or billion-dollar investment firms. Entrepreneurs, consultants, wealth managers, fund administrators, fintech founders, and even family offices are increasingly choosing Cayman as their base of operations.
In this article, we’ll walk through exactly how to open a business in the Cayman Islands, what structures are available, how the setup process works, and how to stay compliant once you’re up and running.
Why the Cayman Islands?
Cayman is not a low-effort, anonymity-at-all-costs jurisdiction. It’s not for hiding assets or cutting corners. What it is — is clean, high-end, and built for businesses that need stability, access to global banking, and a framework that supports serious operations.
Here’s why entrepreneurs choose Cayman:
- No corporate, income, or capital gains tax
- No exchange controls — full freedom of capital movement
- Strong legal system based on English common law
- Home to over 12,000 international companies
- Leading jurisdiction for hedge funds and private equity
- World-class banking and professional services
- Stable, well-regulated, and respected globally
It’s not the cheapest place to set up — but if credibility, tax neutrality, and long-term asset protection matter to you, it’s one of the best.
Types of Business Structures in the Cayman Islands
There are several legal entities available, but most entrepreneurs and small firms choose from one of the following:
1. Exempted Company
The most common offshore business structure in Cayman. Designed for companies that do not plan to trade locally.
Key features:
- 100% foreign ownership allowed
- No corporate tax, no income tax
- No requirement to hold annual meetings in Cayman
- Ideal for holding companies, IP, fintech, funds, and remote service businesses
Most international entrepreneurs use this structure.
2. Limited Liability Company (LLC)
Cayman introduced its own LLC model in 2016, combining features of a traditional exempted company and a US-style LLC.
Key features:
- Pass-through tax treatment in some jurisdictions
- Great for joint ventures, holding structures, and private equity
- Flexible governance — operating agreement instead of memorandum
An excellent option for businesses that need more operational flexibility.
3. Segregated Portfolio Company (SPC)
Used mostly for investment funds and asset managers. Allows you to create legally separate portfolios under a single company umbrella.
Only relevant if you’re in structured finance, insurance, or fund management.
4. Ordinary Resident Company
Used if you want to trade within the Cayman Islands — e.g., open a local shop, restaurant, or service business.
Most offshore businesses do not use this model.
Who Should Use a Cayman Company?
Cayman is best suited for businesses that:
- Need a clean, tax-neutral holding structure
- Are raising international capital
- Want to manage assets or investments
- Operate globally but need a trusted legal base
- Want strong asset protection and confidentiality
Popular use cases include:
- Holding companies for subsidiaries and investments
- Fintech and DeFi projects
- Wealth and estate planning structures
- Private equity and venture capital
- Licensing and royalty companies
- Crypto funds and asset-backed token entities
Step-by-Step: How to Open a Company in the Cayman Islands
Step 1: Choose the Right Structure
Most non-resident founders will choose an Exempted Company or LLC. Your choice depends on:
- Whether you want pass-through tax treatment
- Your country of residence (and its tax treatment of offshore entities)
- Whether you’re planning to issue shares or tokenize assets
Talk to a provider that understands your situation before committing.
Step 2: Select a Licensed Registered Agent
You cannot form a Cayman company yourself. All incorporations must go through a licensed service provider — also known as a registered office or corporate services firm.
Your provider will:
- Handle name reservation and paperwork
- Submit your application to the Cayman Registrar of Companies
- Provide ongoing compliance and maintenance
- Help with banking, nominee services, and optional legal support
Choose wisely — this is your long-term partner.
Step 3: Prepare the Required Documents
You’ll need to submit:
- Certified passport copy of each director and shareholder
- Proof of address (utility bill or bank statement)
- KYC and due diligence forms
- Business plan or description of activities
If you’re using corporate shareholders, you’ll also need:
- Certificate of incorporation
- Certificate of good standing
- Register of directors and shareholders
These documents are submitted by your agent during the application process.
Step 4: Submit the Incorporation Application
Once everything is ready, your agent will submit the full application to the Registrar of Companies. If approved, you’ll receive:
- Certificate of Incorporation
- Company Memorandum and Articles of Association
- Share certificates (if using an Exempted Company)
- Company Register documents
Incorporation typically takes 3 to 5 business days.
Step 5: Open a Bank Account
Banking in Cayman is solid — but selective.
To open a Cayman Islands bank account, you’ll usually need:
- A physical visit to the bank (not always, but often)
- A clear business case and proof of source of funds
- Clean KYC documentation
Not all Cayman companies open Cayman bank accounts. Many founders use:
- Swiss, Liechtenstein, or Luxembourg banks
- Mauritius or UAE banks
- EMIs like Wise, Mercury, or Slope for initial payment flows
Work with a provider who has actual banking relationships — not just a form link.
Ongoing Requirements and Compliance
Once your company is formed, there are a few key requirements to stay compliant:
- Annual renewal fee (paid to government via your agent)
- Maintain a registered office in Cayman
- Keep a Register of Beneficial Owners
- File a simple annual return confirming your status
- Keep proper accounting records (not filed, but must be maintained)
There’s no audit requirement for most small companies, and no local tax filings if you’re not operating in the Cayman Islands.
How Much Does It Cost?
Ballpark costs for setting up a Cayman company:
- Incorporation (Exempted Company or LLC): $3,000 – $6,000
- Annual renewal: $2,000 – $4,000
- Banking support (optional): $1,000 – $2,500
- Nominee services (if used): $1,500+ per year
Higher than some other jurisdictions, but you’re paying for quality, not anonymity.
Pros and Cons of Starting a Cayman Company
Pros
- No income, capital gains, or corporate tax
- Clean, respected jurisdiction — not blacklisted
- Strong legal protections and stability
- Great for asset holding, fund structuring, and IP licensing
- Confidentiality (beneficial owners not publicly listed)
Cons
- Not the cheapest — setup and maintenance costs are higher
- Banking can be strict, especially post-2020
- Not anonymous — transparency and KYC are enforced
- Not suitable for local trading without a resident license
Is a Cayman Company Right for You?
A Cayman company isn’t for everyone. If you’re trying to run a lightweight Shopify store or invoice $2,000/month as a freelancer, this is probably overkill.
But if you’re:
- Managing wealth
- Raising capital
- Holding global assets
- Operating a fund, a DAO, or a fintech platform
- Planning for long-term succession or asset protection
Then Cayman might be the most stable, flexible, and future-proof offshore base available.
Final Thoughts
Opening a business in the Cayman Islands is a smart move — if you’re serious about building something that lasts. It offers zero tax, high credibility, and access to some of the best financial and legal services in the world.
But don’t go into it blind. Work with a provider who understands the rules, can help you stay compliant, and knows how to structure your company to match your business goals.
Want to compare Cayman formation providers side by side? Browse verified agents and services on OffshoreElite and build your Cayman structure the right way.