Cayman Islands company

[trek6453]

Hi

Potentially looking to create a company in the Cayman Islands. Does anyone have any reasonably priced but decent accountants or firms that can help with this? How much annual running costs would be generally for a Cayman company? I have no idea so open to also other 0% tax places that have lower running costs

 

[bibing]

I had a CY company like 10 years ago and it was quite price to run it (like 5,000USD) and back there there was basically no docs to file. Don't know how it is today.

 

[Sols]

Don't go to Cayman Islands if cost is a significant concern. It's never been a jurisdiction that competes on price. It's not as expensive as Bermuda but you'd need to be comfortable with around 10,000 USD for incorporation and similar amount in annual fees.

Unless you have a very specific reason for going Caymans but want something comparable, look into BVI, Anguilla, and TCI (Turks and Caicos).

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This is the probably the answer to your question.

 

[trek6453]

Sols said:
Don't go to Cayman Islands if cost is a significant concern. It's never been a jurisdiction that competes on price. It's not as expensive as Bermuda but you'd need to be comfortable with around 10,000 USD for incorporation and similar amount in annual fees.

Unless you have a very specific reason for going Caymans but want something comparable, look into BVI, Anguilla, and TCI (Turks and Caicos).
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Thank you! Im all new to this so jsut trying to see what works. Quite flexible to location so will look at ones you suggested

 

[KDX]

Sols said:
Don't go to Cayman Islands if cost is a significant concern. It's never been a jurisdiction that competes on price. It's not as expensive as Bermuda but you'd need to be comfortable with around 10,000 USD for incorporation and similar amount in annual fees.

Unless you have a very specific reason for going Caymans but want something comparable, look into BVI, Anguilla, and TCI (Turks and Caicos).
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Not sure what you mean by 10,000 USD for incorporation? it definitely costs less, half of that really from what ive been quoted.

But the substance and e.g. director services can cost that much, I think right around that 10K mark. Probably cheaper alternatives out there but yeah.

 

[trek6453]

I think I wanted Cayman just as it seemed a bit safer for banking options instead of the others but that was just my impression and not based on real world experience. Would be good to know though as the likes of all these seem to have a bit of a bad rep and I would rather lean towards something a bit more safer and less risk

 

[KDX]

trek6453 said:
I think I wanted Cayman just as it seemed a bit safer for banking options instead of the others but that was just my impression and not based on real world experience. Would be good to know though as the likes of all these seem to have a bit of a bad rep and I would rather lean towards something a bit more safer and less risk
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It really depends on your business and how much money you have to bring to the bank.

If you keep nothing on the account, they don't make anything.

Cayman is one of the best jurisdictions because it's got a lot of assets under management on the island from all the funds and all the holding companies for Chinese companies, etc.

It's also got less privacy and more regulation than e.g. BVI.

But it's excellent because it's basically 'too big to fall' since it's not like you can move all that money off in an instant.

Great for hedge funds, etc. everybody is familiar with it.

So when you go Cayman, that's what you're paying for.

If you're looking for cheap, you don't want to go Cayman.

You must bring something for the banks. Some kind of compensation for them having to put extra attention on your account, etc.

Offshore is the opposite of cheap. It's not. You do it because you have to, or because you're big enough that it makes sense to do tax dtructuring. not because it's an easy way to drop your tax rate to 0%.

And there are substance requirements etc. that you must meet.

Do not go pay for some cheap formation, especially the ones that claim they serve all the locations. Contact a boutique law firm and buy an hour of consultation to get an idea of how things go.

 

[trek6453]

KDX said:
It really depends on your business and how much money you have to bring to the bank.

If you keep nothing on the account, they don't make anything.

Cayman is one of the best jurisdictions because it's got a lot of assets under management on the island from all the funds and all the holding companies for Chinese companies, etc.

It's also got less privacy and more regulation than e.g. BVI.

But it's excellent because it's basically 'too big to fall' since it's not like you can move all that money off in an instant.

Great for hedge funds, etc. everybody is familiar with it.

So when you go Cayman, that's what you're paying for.

If you're looking for cheap, you don't want to go Cayman.

You must bring something for the banks. Some kind of compensation for them having to put extra attention on your account, etc.

Offshore is the opposite of cheap. It's not. You do it because you have to, or because you're big enough that it makes sense to do tax dtructuring. not because it's an easy way to drop your tax rate to 0%.

And there are substance requirements etc. that you must meet.

Do not go pay for some cheap formation, especially the ones that claim they serve all the locations. Contact a boutique law firm and buy an hour of consultation to get an idea of how things go.
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Thank you that is really helpful. Cayman does sound nice but way out of my range I feel. I'm after a country that can get decent banking (not necessarily same country), no tax and small annual obligations

 

[KDX]

trek6453 said:
Thank you that is really helpful. Cayman does sound nice but way out of my range I feel.
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What is the nature of your business? If you can give a better description of it, then it'd be possible to maybe recommend something else.

And how much money are you moving? Revenue, profit, where are the clients? EU/US/SEA? B2B or B2C? etc.

You need to remember that there is time and energy that you must spend with the extra complexity involved, so unless you like doing it, it's also a factor to consider.

Decent banking, small tax and small annual obligations sounds a bit fantasy-like to me.

The country of incorporation, when it comes to the offshore jurisdictions doesn't really matter. What matters is the substance and what you bring to the table.

That will be much more than what any annual obligations would cost. I wouldn't even consider that as part of my deciding factors.

 

[trek6453]

I trade and invest my own money in stocks, shares, ETFs crypto. No clients, all profit will go to me based in UK. I'm looking to pay UK tax for everything but need a company offshore to give me access to products that arent allowed to UK people. So the offshore company should have 0% tax, very little annual obligations whilst the tax reporting and business happens in the UK. Initially looking to invest $10k via the new company, which may grow if things go well. So company banking is key for me to bring the funds back into the UK

 

[Cloudbanck]

Note that you can get zero tax even with a company in a non-zero tax country. For example with a US LLC if you are not a US person, or a Canada or UK LLP, or a non resident UK LTD. These options are much cheaper than tax haven companies, and typically offer much better banking options.

 

[trek6453]

Cloudbanck said:
Note that you can get zero tax even with a company in a non-zero tax country. For example with a US LLC if you are not a US person, or a Canada or UK LLP, or a non resident UK LTD. These options are much cheaper than tax haven companies, and typically offer much better banking options.
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Unfortunately I'm a UK resident and not looking to move 🙁

 

[Cloudbanck]

trek6453 said:
Unfortunately I'm a UK resident and not looking to move 🙁
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Ah yeah, you got live in a low/no/territorial tax place for this to work.

 

[KDX]

trek6453 said:
I trade and invest my own money in stocks, shares, ETFs crypto. No clients, all profit will go to me based in UK. I'm looking to pay UK tax for everything but need a company offshore to give me access to products that arent allowed to UK people. So the offshore company should have 0% tax, very little annual obligations whilst the tax reporting and business happens in the UK. Initially looking to invest $10k via the new company, which may grow if things go well. So company banking is key for me to bring the funds back into the UK
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I see. I'm quite familiar with this.

I would say, with the money you're investing, you will have to sacrifice a good part of it for the company. Just no getting around that.

Cayman is too overkill though. I would say go BVI and get an EMI.

Be prepared to pay. If you want to do things professionally, that's what you must do.

There's just no getting around it these days, that is the thing you must realize. otherwise you'll be wasting your money for something that was never possible.

Forget about trying to cut the costs and focus on what your actual business goal is.


However it could be that a US LLC could work also depending on the situation, but then the banking part can be problematic if you're not a resident.


This advice is all assuming that you're planning to become an active trader and to seek high returns, not passive, diversified investing. If that's what you're after, just focus on another business honestly. Not worth the effort/cost.

 

[trek6453]

KDX said:
I see. I'm quite familiar with this.

I would say, with the money you're investing, you will have to sacrifice a good part of it for the company. Just no getting around that.

Cayman is too overkill though. I would say go BVI and get an EMI.

Be prepared to pay. If you want to do things professionally, that's what you must do.

There's just no getting around it these days, that is the thing you must realize. otherwise you'll be wasting your money for something that was never possible.

Forget about trying to cut the costs and focus on what your actual business goal is.


However it could be that a US LLC could work also depending on the situation, but then the banking part can be problematic if you're not a resident.
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Thank you. After your initial message and some further research, sounded like Cayman was overkill too, I agree. Any recommendations for firms that can help create a BVI company? Looked at the Resources list and the Apollo one was the only one so keen for others to compare against.

Why BVI compared to other places out of interest? E.g Seychelles, Belize, Anguilla

 

[KDX]

trek6453 said:
Thank you. After your initial message and some further research, sounded like Cayman was overkill too, I agree. Any recommendations for firms that can help create a BVI company? Looked at the Resources list and the Apollo one was the only one so keen for others to compare against.

Why BVI compared to other places out of interest? E.g Seychelles, Belize, Anguilla
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Because of the reputation. Look at assets under management in BVI vs. those others.

And it's a British Overseas Territory.

BVI has got a bargaining chip, the others really don't.

There's a lot more that goes to it than just the 'specs'.

It might be more shady in the eyes of the public because of its hifh profile, but for banks I'd say Seychelles etc is just much worse.

Just to confirm. Are you going to trade actively, or are you going to just invest here and there?

You have to realize that you'll need to pay probably at least a few thousand in costs for the entity per year, just so you're aware of that.

So unless you plan on doing this seriously, I'd reevaluate your plans right now before you start paying.

 

[trek6453]

KDX said:
Because of the reputation. Look at assets under management in BVI vs. those others.

And it's a British Overseas Territory.

BVI has got a bargaining chip, the others really don't.

There's a lot more that goes to it than just the 'specs'.

It might be more shady in the eyes of the public because of its hifh profile, but for banks I'd say Seychelles etc is just much worse.

Just to confirm. Are you going to trade actively, or are you going to just invest here and there?

You have to realize that you'll need to pay probably at least a few thousand in costs for the entity per year, just so you're aware of that.

So unless you plan on doing this seriously, I'd reevaluate your plans right now before you start paying.
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I will probably trade as much as I can so will try keep things running for a few years at least. Thank you so much for your help so far, you are a star in this forum. Any recommendations on BVI people that can help create the company? Besides the single one listed in resources

 

[KDX]

trek6453 said:
I will probably trade as much as I can so will try keep things running for a few years at least. Thank you so much for your help so far, you are a star in this forum. Any recommendations on BVI people that can help create the company? Besides the single one listed in resources
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I unfortunately can't recommend any of my contacts because I don't personally know your situation, but you'll need some formation agent or lawyer to draft up the documents and send them over to the authorities and then have the registered office etc.

The incorporation process is easy. The banking isn't.

So go figure that out before you incorporate the company is what I'd do.

Same with your broker.

 

[Martin Everson]

trek6453 said:
Initially looking to invest $10k via the new company, which may grow if things go well.
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Mate it is not worth going offshore yet with this kind of money. You need to look at the full annual costs of an offshore setup in Caribbean which is not cheap if done properly. I understand you want access to instruments that as a UK retail investor are not possible due to PRIIP etc but I don't think this is a good idea just yet. The overheads will eat into your profits.

trek6453 said:
I trade and invest my own money in stocks, shares, ETFs crypto. No clients, all profit will go to me based in UK. I'm looking to pay UK tax for everything but need a company offshore to give me access to products that arent allowed to UK people. So the offshore company should have 0% tax, very little annual obligations whilst the tax reporting and business happens in the UK.
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Sorry how does a company help here versus just using a personal account on an offshore broker based outside UK and EU?

trek6453 said:
Unfortunately I'm a UK resident and not looking to move
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I don't know your risk appetite but judging by your interest in crypto it would be quite high. You know there are ways to invest within the UK and earn regular income that you don't need to pay taxes on or even declare on your tax return to HMRC and all legally?

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[trek6453]

Martin Everson said:
Mate it is not worth going offshore yet with this kind of money. You need to look at the full annual costs of an offshore setup in Caribbean which is not cheap if done properly. I understand you want access to instruments that as a UK retail investor are not possible due to PRIIP etc but I don't think this is a good idea just yet. The overheads will eat into your profits.



Sorry how does a company help here versus just using a personal account on an offshore broker based outside UK and EU?



I don't know your risk appetite but judging by your interest in crypto it would be quite high. You know there are ways to invest within the UK and earn regular income that you don't need to pay taxes on or even declare on your tax return to HMRC and all legally?
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At the moment yes, most transactions will be via personal account as that is better tax wise for me. If CGT tax was to change though, I would put more through the new company. It give me a different option in case I need it and better access. So keen to keep costs as low as possible for now

Tax free within UK - are you talking about ISAs and SIPPs or something beyond those? Interested to hear more