Company terminations outweigh new registrations

Company-registrations-2015-WEBThe Cayman Islands Company Registry saw an 8-percent increase in new companies in 2015, but the number of active companies on the registry failed to breach the 100,000-company mark as terminations exceeded new registrations.

New registrations have grown for three consecutive years, and last year’s increase followed 17 percent growth in 2014.

But despite 11,864 new companies registered in the Cayman Islands last year, the number of active companies declined by 1 percent, from 99,459 to 98,838.

Company terminations jumped 66 percent, from 7,321 in 2014 to 12,206 in 2015. Both active resident and non-resident companies on the register experienced a 12 percent decline, whereas exempt companies, the most common company type, continued to increase by 1 percent.

The number of non-resident companies has constantly fallen since 2006.

But the drop in resident companies from 7,037 in 2014 to 6,186 companies last year was the first decline since 2010 and only the second time the number of local companies has dropped in the past 10 years.

The substantial decline in local companies came before the introduction of a new Trade and Business Licensing Law in January 2016, which introduced stricter license renewal terms, including requiring evidence of compliance with pension and health insurance provisions and planning laws, and harsher penalties for operating without a license.

Meanwhile, partnership registrations set a new record with 3,370 new partnerships registered in 2015, compared with the previous high of 2,893 new partnerships in 2014.

Active partnerships registered in Cayman climbed 16 percent to an all-time high of 18,041 last year.

New trust registrations fell to 104 during the period from 140 new trust registrations a year earlier. However, terminations of trusts also dropped from 142 in 2014 to 108 in 2015.

As a result, the number of active trusts registered in Cayman remained virtually unchanged at 1,789, compared to 1,804 in 2014.