In 2011 the Cayman Islands passed a Special Economic Zone Law which introduces the concept of special economic zones (SEZs) and a new type of company registration.
Cayman Enterprise City, the first SEZ operator in Cayman, encourages knowledge-based businesses to have a physical presence in the Cayman Islands, by offering advantages and concessions which can make it a cost-effective base for businesses to operate globally.
A special economic zone company is not allowed to trade locally with any person, firm or corporation except for purposes that further its business carried on outside of Cayman.
Companies incorporated in the Cayman Islands already enjoy a number of benefits, including no corporate tax, no capital gains tax, 100 per cent repatriation of capital and profits, and no currency restrictions.
In addition advantages for a special economic zone enterprise in Cayman include exemption from the Trade and Business Licensing Law, the Local Companies (Control) Law, the Electronic Transactions Law and the Land Acquisition Law.
There is also an exemption until 2061 from liability to pay any direct or indirect taxes, import or other duties or fees including those associated with registration, filing, employment, immigration, work permits and income and gains that are or may be levied by the government.
CEC provides for 100 per cent foreign ownership and companies benefit from a streamlined and efficient incorporation process.
Interested businesses must first apply to the zone operator, CEC, for tenancy space. In order to carry on SEZ business, a company must either be an exempted company or an exempted limited partnership and must hold a valid zone trade certificate. The exempted company is set up through a local Cayman law firm, a process that can be expedited within 24 hours, subject to normal due diligence processes.
Once the exempt company is registered, CEC will support applicants through the process of obtaining a zone trade certificate that completes the establishment of a special economic zone company.
CEC will direct the application for a zone trade certificate to the SEZ Secretariat, which reviews the application, conducts the required due diligence and sends the application to Special Economic Zone Authority’s licensing committee for approval.
The Authority may within three working days of receipt of the application ask for more information after which the applicant has 14 days to respond. The Authority then has seven days to grant or refuse the application giving reasons.
CEC will also assist in obtaining zone employment certificates that enable a zone company’s management and staff to live and work in the Cayman Islands.
Special economic zone companies can be established and fully operational within ten working days.