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).

 

[trek6453]

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]

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 that︀ 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]

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 from︀ all the funds and all the holding companies for Chinese companies, etc.

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

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

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

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

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

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

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

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

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

 

[trek6453]

Thank you that is really helpful. Cayman does sound nice but way out of︊ my range I feel. I'm after a country that can get decent banking (not necessarily︋ same country), no tax and small annual obligations

 

[KDX]

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 obligations︀ sounds a bit fantasy-like to me.

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

That will be much more than what any annual obligations would cost. I︃ 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]

Unfortunately I'm a UK resident and not looking to move 🙁

 

[Cloudbanck]

Ah yeah, you got live in a low/no/territorial tax place for this to work.

 

[KDX]

I see. I'm quite familiar with this.

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

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

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

There's just no getting around it these days, that is the︅ thing you must realize. otherwise you'll be wasting your money for something that was never︆ possible.

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

However it could be that a US LLC could work also depending on︈ 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 to︊ seek high returns, not passive, diversified investing. If that's what you're after, just focus on︋ another business honestly. Not worth the effort/cost.

 

[trek6453]

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

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

 

[KDX]

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 it︀ than just the 'specs'.

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

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

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

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

 

[trek6453]

I will probably trade as much as I can so will︂ try keep things running for a few years at least. Thank you so much for︃ your help so far, you are a star in this forum. Any recommendations on BVI︄ people that can help create the company? Besides the single one listed in resources

 

[KDX]

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 process︀ is easy. The banking isn't.

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

Same with your broker.

 

[Martin Everson]

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 using︄ a personal account on an offshore broker based outside UK and EU?

I don't know︅ 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 that︇ you don't need to pay taxes on or even declare on your tax return to︈ HMRC and all legally?

 

[trek6453]

At the moment yes, most transactions will be via personal account as︄ that is better tax wise for me. If CGT tax was to change though, I︅ would put more through the new company. It give me a different option in case︆ I need it and better access. So keen to keep costs as low as possible︇ for now

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