Company formationCaribbeanCayman Islands exempted company formation
A Cayman Islands exempted company is a company registered under the Companies Act whose objects are carried out mainly outside the islands, typically as a fund, holding or special purpose vehicle. As of October 2026 it pays no Cayman corporation or capital gains tax, and it can obtain a tax exemption undertaking for up to 30 years.
Updated
An exempted company is registered through a corporate service provider licensed by the Cayman Islands Monetary Authority, whose address becomes the registered office. The General Registry processes standard applications in three to five business days, or within 24 hours with the express service. One shareholder, who can also act as sole director, is enough to form the company.
After registration the company sends its register of directors to the Registrar within 60 days, keeps a beneficial ownership register through its corporate service provider and maintains proper books of account. Director names can be inspected on request; the register of members of an exempted company is not public.
Each January the company files an annual return. Separately, it notifies the Department for International Tax Cooperation every year whether it carries on a relevant activity; if it does, it files an economic substance return within 12 months of its financial year end.
Fund vehicles add a regulatory layer: private and mutual funds register with the Cayman Islands Monetary Authority and have their accounts audited every year by an approved auditor. An ordinary exempted company has no audit requirement.
Cayman law firms and licensed service providers give the legal advice; Redomiciled coordinates the structure and the parties involved.
Who it suits
Fund sponsors and managers
You are launching a private equity, venture, hedge or digital asset fund for international investors.
Master–feeder and co-investment structures
You pool capital from investors in several countries and need a vehicle all of them accept.
Holding and special purpose companies
You need a tax-neutral company for a transaction, a financing or a group holding, often next to a fund.
Groups preparing for international investors
Your investors or advisers expect a Cayman holding company above the operating group.
Requirements
- Required
Licensed corporate service provider and registered office
The provider's address in Cayman serves as the company's registered office.
- Required
At least one shareholder and one director
The same person can hold both roles, and neither has to live in Cayman.
- Required
Register of directors filed with the Registrar
Within 60 days of the first appointment and 30 days of any change.
- Required
Beneficial ownership register
Individuals with 25% or more of the shares or votes, or other control, are verified and recorded through the service provider.
- Required
Annual return and substance notification
Filed every year, including by companies without any relevant activity.
- Depends on your case
Economic substance in Cayman
Needed where the company carries on a relevant activity, with a reduced test for pure holding companies; investment fund business is outside the regime.
- Depends on your case
Audit
Not required for an ordinary exempted company; registered funds are audited every year.
- Depends on your case
Tax exemption undertaking
Applied for after registration and given for up to 30 years.
Documents
- Memorandum and articles of associationObjects, share capital and governance; fund vehicles usually adopt bespoke articles.
- Service provider engagementAgreement with the licensed provider that acts as registered office and keeps the statutory registers.
- Due diligence on owners, directors and controllersIdentity, address and source-of-wealth evidence collected by the provider.
- Structure chart and description of activitiesHow the company fits into the wider structure and where its business is carried on.
- Offering documents (funds only)Offering or private placement memorandum, filed with CIMA on registration.
Timeline
- 1Structure designAgree the role of the Cayman company, the investors it will serve and where management and decisions will sit.
- 2Provider onboarding and due diligenceThe corporate service provider reviews every owner and director before filing.
- 3RegistrationFiled with the General Registry: three to five business days, or within 24 hours with the express service.
- 4Post-registration filingsRegister of directors, beneficial ownership register and, where wanted, the tax exemption undertaking.
- 5Regulatory and banking setupFund registration with CIMA where relevant, then administrator and bank accounts, each subject to its own checks.
- 6Annual cycleJanuary annual return, economic substance notification and, where required, the substance return and fund audit.
Tax notes
- Cayman levies no corporation, capital gains, payroll, property or withholding taxes, and an exempted company can obtain an undertaking that this will apply to it for up to 30 years from approval.
- Neutral at fund level means taxable at investor level: investors and managers are taxed under the rules of their own countries, and a company effectively managed elsewhere may be treated as resident there.
- Cayman exchanges financial account information under CRS and FATCA. The amended CRS rules and the Crypto-Asset Reporting Framework apply from 1 January 2026; the first CARF returns are due by 30 June 2027, with first exchanges expected that year.
- Entities with a relevant activity must meet the economic substance test. A failure costs CI$10,000 for the first year and CI$100,000 if the company fails again in a later year, on top of possible strike-off.
General information, not tax advice. Your position depends on your circumstances.
Banking fit
- Fund accounts are usually opened together with the fund administrator, and banks review the manager, investor onboarding and the offering documents.
- Holding and special purpose companies are banked where their transactions happen, under the same scrutiny banks apply to other offshore entities.
- Redomiciled does not currently introduce Cayman banks; we help arrange accounts for related entities in other jurisdictions, subject to each institution's due diligence.
Questions
What is a Cayman exempted company used for?
Mainly for investment funds, fund-related vehicles, holding companies and special purpose companies. It must carry on its business mainly outside the islands, so it is rarely the right choice for an ordinary trading business.
Does a Cayman company need economic substance?
Only if it carries on a relevant activity, such as fund management, financing, headquarters or holding business. Every company still files an annual notification with the tax authority, and investment funds themselves fall outside the regime.
Is Cayman company ownership public?
No. Beneficial owners with 25% or more are recorded through the corporate service provider and available to the authorities, and since February 2025 applicants with a legitimate interest can request limited information. Director names can be obtained from the Registrar.
How long does it take to form a Cayman company?
The Registry processes standard applications in three to five business days and express applications within 24 hours. Provider due diligence comes first, and for funds the offering documents and CIMA registration take considerably longer.
Do I need to live in Cayman to own an exempted company?
No. Shareholders and directors can live anywhere. Where the board actually takes its decisions can matter for tax in other countries, so plan the board's composition and meetings with your advisers.
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Sources
- Cayman Islands General Registry: Companies fee schedule effective 1 January 2025, retrieved 2026-10-25
- Cayman Islands General Registry: Annual fee amendments effective 1 January 2027 (notice of 9 September 2026), retrieved 2026-10-25
- Cayman Islands General Registry: FAQs, retrieved 2026-10-25
- legislation.gov.ky: Companies Act (2026 Revision), retrieved 2026-10-25
- legislation.gov.ky: Tax Concessions Act (2018 Revision), retrieved 2026-10-25
- Cayman Islands General Registry: Advantages of registration, retrieved 2026-10-25
- legislation.gov.ky: International Tax Co-operation (Economic Substance) Act (2026 Revision), retrieved 2026-10-25
- legislation.gov.ky: Beneficial Ownership Transparency Act (2026 Revision), retrieved 2026-10-25
- legislation.gov.ky: Beneficial Ownership Transparency (Legitimate Interest Access) Regulations, 2024, retrieved 2026-10-25
- legislation.gov.ky: Crypto-Asset Reporting Framework Regulations, 2025, retrieved 2026-10-25
- legislation.gov.ky: Common Reporting Standard (Amendment) Regulations, 2025, retrieved 2026-10-25
- Council of the EU: EU list of non-cooperative jurisdictions updated (9 October 2026), retrieved 2026-10-25
- Council of the EU: Cayman Islands removed from the EU list (6 October 2020), retrieved 2026-10-25
- FATF: Jurisdictions under increased monitoring, October 2023, retrieved 2026-10-25
- Cayman Islands Monetary Authority: Investment funds, retrieved 2026-10-25
- legislation.gov.ky: Private Funds Act (2025 Revision), retrieved 2026-10-25
- DITC: Collective engagement to implement the Crypto-Asset Reporting Framework, retrieved 2026-10-25
- Redomiciled internal briefing: Cayman and BVI fund structures, retrieved 2026-10-25
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