Company formation sector broke records last year

Cayman Compass is the Cayman Islands' most trusted news website. We provide you with the latest breaking news from the Cayman Islands, as well as other parts of the Caribbean.
Cayman Compass is the Cayman Islands' most trusted news website. We provide you with the latest breaking news from the Cayman Islands, as well as other parts of the Caribbean.

A record 16,326 companies formed in Cayman last year, contributing to the number of active companies reaching 107,309 – also a record – at year’s end.

There was also a record 26,381 active partnerships at the end of 2018. According to recently released statistics from the General Registry, the number of companies has grown steadily since the end of 2017, from 99,327 at Dec. 31 to 103,759 at the end of June, to its current level as of December.

The number of companies here exceeded 100,000 last March, the first time it has broken the six-figure level since the number of active companies reached a then-record 102,369 in September 2016. That was shortly before taking a dip when around 8,500 were struck off the registry.

Exempt companies saw the most growth last year, with 13,893 such entities registering and 90,265 active at year’s end. Additionally, 729 new resident companies were created last year, putting the total active number of local companies at 6,840.

Limited Liability Corporations grew from 889 at the end of 2017 to 1,710 at the end of 2018, foreign companies grew from 4,601 at the end of 2017 to 5,029 at the end of last year, and non-resident companies declined from 3,871 at the end of 2017 to 3,465 at the end of last year.

Partnerships, for their part, grew from 22,655 at the end of 2017 to 26,381 a year later.

In late 2018 and early 2019, new incorporations here have slowed slightly. While Cayman averaged 1,409 new company registrations through November, that average dipped to 1,050 from December through February – 820 companies formed here in December, 1,337 formed in January, and 993 formed last month.

Cayman was not the only offshore jurisdiction to see an uptick in company formations last year. Incorporations in the British Virgin Islands – the leading offshore jurisdiction for incorporations – hit a nearly three-year high in the first quarter of 2018, with 9,798 new companies forming there, according to statistics from the BVI Financial Services Commission.

The Q1 performance was the BVI’s best quarter for company incorporations since the third quarter of 2015, when 11,951 new companies formed. That increase continued for the next two quarters, with 9,126 registering in Q2 and 9,575 forming in Q3.

Q4 data has not been released yet for the BVI, but the territory is on pace to see in 2018 its the first substantial uptick in company incorporations since the territory’s reputation suffered from the April 2016 reports on the Panama Papers – leaked documents allegedly showing BVI-registered companies being used for illegal activity.

Along with the uptick in new formations, the BVI also saw a major increase in its total number of active companies, from 389,459 in Q4 of 2017 to 422,594 in Q3 of last year (the number of total companies can increase by more than new incorporations when previously dormant companies reactivate).

However, the long-term trend has Cayman’s company-formation sector growing, while the BVI’s has been shrinking. Whereas the BVI has seen its number of registered companies decline by nearly half – from around 800,000 in the mid-2000s to 422,594 as of the third quarter of 2018 – Cayman has seen an increase from 83,532 in 2006 to around 107,000.

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