The Cayman Islands is a group of three islands found in the Western Caribbean Sea. The island nation is made up of Grand Cayman, Little Cayman and Cayman Brac. The Cayman Islands are British dependent territories. The Cayman Islands have gained popularity from around the world for its offshore financial centre in fact the Cayman islands is there the world’s fifth (5th) largest financial offshore centre.
The Cayman Islands is best known for the following offshore services, the formation of offshore trusts, the incorporation of offshore companies or Cayman International Business Companies (IBCs), offshore banking, captive insurance, registration of boats and vessels among other services. The Cayman Islands can also be described as a tax haven.
Tax haven Cayman does not tax offshore companies on income earned outside of the territory making it fit into the category of tax havens, since, a tax haven is a country or jurisdiction which has low tax or no taxes at all in place for corporations and other entities. The Tax haven of Cayman Islands has no taxation system in place for Cayman International business companies. Offshore corporations incorporated in the Cayman Islands will pay no income tax or corporate taxes on capital gained abroad. Capital includes interests, profits and dividends. Cayman Islands trust and offshore business entities are exempted from paying Stamp Duty for transaction done on behalf of the two. There is no capital gains tax, income tax, corporate tax, estate tax, gift tax, withholding tax and inheritance tax applied in the offshore tax haven of the Cayman Islands.
Cayman offshore companies must pay annual license fees which are based on the amount of authorized share capital that the offshore corporation has. Tax haven Cayman makes incorporating offshore companies very easy and confidential. When incorporating there is no need to reveal the identity of the true owners of Cayman Islands offshore Company. The names of the beneficial owners of Cayman offshore companies are not filed as public record. Offshore companies legislation of the Cayman Island provides a further layer of privacy by allowing the services of nominee shareholders and directors to be used for corporation. Only one shareholder and one director are needed for company incorporation. The shareholder and director of a Cayman offshore company can be the same natural person. The Cayman Islands became a popular a popular offshore tax haven because it provided privacy and confidentiality to its clients. Privacy and confidentiality are two of the main characteristics of a true tax haven.
The Cayman Islands is home to some of the world’s most trusted offshore financial institutes. As a tax haven providing offshore banking and banking services, the tax haven of the Caymans have put some very strict banking privacy laws in place to protect its clients. International banking requires that all banks know the clients that they take on. In the tax haven Cayman it is illegal for person to give out information concerning offshore bank account holder or offshore bank accounts without the permission of the bank account holder. Unauthorized disclosure of offshore bank information can result in strict fine which can result with the perpetrator facing a prison term.
The Cayman Islands have not signed any double tax treaties with any foreign nations. This means the financial status of offshore corporation’s owners and other offshore clients are safe from the tax authorities of their respective countries. Offshore companies incorporated in the Caymans islands are not mandated by law to report their annual financial reports to any authorities present on the jurisdiction. Company’s accounts are kept for their benefit and at any location convenient to them. This goes to show the extent at which the Cayman Island respects the privacy of its offshore business companies. In the offshore tax haven of the Cayman Islands there is no exchange controls in place. This therefore means that there is no need to declare source of funds. The absence of exchange controls law in place makes it easier for corporations to move funds from the Cayman Island to other locations which are very beneficial to those offshore companies which engage in trade and investment activities on the global market. The Cayman Islands offshore sector was designed to present a flexible environment for offshore entities.
The Cayman Islands have over the years been able to provide offshore clients with a sure means of reducing tax liabilities. The Cayman Islands is a very good jurisdiction to consider for tax planning. The Caymans Islands have been known to provide asset protection for its clients maintaining strict laws towards the privacy of its offshore clients. The offshore tax haven of the Cayman Islands provides excellent offshore services and with many years experience they have become very efficient at what they do.