Highest numbers since financial crisis
The Cayman Island Registry has seen the highest number of newly formed companies in the first 11 months of this year since 2008.
“Notwithstanding the significant reduction in structured financial transactions in Cayman overall, the company figures have clawed back to some 93,612 [in 2012], which is very close to the all-time high,” Tony Travers, senior partner with Travers Thorp Alberga, said at the Cayman Captive Forum earlier this month. “These numbers again are robust, as are the incorporations for the year.”
Through November, 8,770 new companies were registered, a 6.2 percent jump over the same period last year. Registrations are set to exceed last year’s total of 8,971 and reach the highest number of new formations since 2008 (11,861). Annual company registrations peaked in 2007 at 14,240. The total number of active companies is likely to exceed the previous high of 93,693 in 2008.
“The Cayman Islands remains one of the top offshore jurisdictions for incorporations, reflecting the contractual flexibility and legal certainty enjoyed by companies incorporated there,” said Richard McMillan, managing director of Appleby Trust (Cayman) Ltd. “This has been a buoyant year for Cayman and we expect this trend to continue into 2014.”
Appleby reported that across offshore jurisdictions, there was a total of 38,416 new incorporations in the first six months of this year, and the overall number of active companies listed on offshore registers is stabilizing. Within most offshore locations, the total number of companies listed on the local register has increased since the end of 2012. The number of new incorporations across the whole offshore region has fallen slightly compared with the previous six-month period, but as the number of firms ceasing to trade has also dropped, this has allowed most registries to continue to grow. Like Cayman, many jurisdictions are approaching, or have even surpassed, their pre-recession peaks.
“The global economy appears to be stabilising, and we’re seeing the number of new company registrations rising in most offshore jurisdictions,” said Farah Ballands, partner and global head of Fiduciary & Administration Services at Appleby. “It is also encouraging to note that the overall number of companies active on the offshore registers has gone up by 5 percent compared to pre-recession 2008.”
New partnership registrations in Cayman through November (2,170) have increased 13.75 percent year-on-year and are expected to surpass the highest annual number of 2,188 from 2008. Active partnerships on the register already reached a record high in September 2013 at 14,165.
To bolster company and partnership registrations, government recently announced that it would table several bills in January 2014. The Financial Services Legislative Committee has submitted proposals for third-party contractual rights legislation, limited liability company legislation and a major overhaul of exempted limited liability partnerships legislation, Roy McTaggart, financial services councilor, said at the Ernst & Young hedge fund symposium on Dec. 12.
Meanwhile, new trust registrations in 2013 are up 10.28 percent compared to the first 11 months of 2012. However, 2012 saw a 16.4 percent drop of trust registrations, and 2013 figures are unlikely to entirely offset this decline in activity from 2011.