Most dismiss the Cayman Islands as an investment opportunity because of the high costs and difficulties of getting residency. One tax program and one company are trying to change that image one business at a time… and having amazing results. In this article, we will discuss taxes and tax laws in the Cayman Islands, startup companies, and possible restrictions that moving your business to the Cayman Islands may have.
Thanks to the rumors and slander, the economy of the Cayman Islands has suffered a bit. The Cayman Islands is a gorgeous country that boasts fantastic tropical beaches and a warm and amiable population.
Don’t Listen to the Media
Don’t listen to what the media has to say about the Cayman Islands. You can get ahead in this hyper competitive market by opening your business in the country by using a tool that has been present for a long time.
Tax Laws in the Cayman Islands
Tax law in the Cayman Islands is a subject that has had its fair set of changes in the last decade. Still, this should not be a problem to foreign investors as the government of the Cayman Islands is very welcoming to foreign investors.
One business group that has been taking advantage of the incentives that opening a business in the Cayman Island brings is technology-based companies. Startups and online business are entering the country in flocks.
Technology-based businesses are facing extreme competition these days and it has become harder and harder to survive in this economy. Some are operating from outside of the United States in order to get traction.
Startup Companies in the Cayman Islands
Startups can begin operating in the Cayman Islands fairly easy. Compared to other foreign jurisdictions, the Cayman Islands has some of the most relaxed immigration laws that you will see.
If you open a business in the Cayman Islands you will receive a 5-year residency visa. The best part is that you can sponsor your employees from the United States and they can bring their wives and their families with them.
Opening a business inside of the Cayman Island lets you partake in activities that are banned to most Americans. For instance, you have all of the access you need to the banks inside of the island and can navigate their credit system like somebody from the island would.
You will gain a huge advantage over other technology-based companies as these services are limited only to Americans who own a house in the Cayman Islands, or others with a licensed business. Every other American is banned to work with the banks and the financial institutions based on the island.
Taxes in the Cayman Islands
Of course, we all know the real reason why internet companies are moving to the Cayman Islands, taxes. Taxes are one of the prime reasons why a Startup company goes bankrupt within the first few years, so naturally, if you tell people of a way that they can avoid them for the first few years they stop speaking and pay attention.
Any business inside of the Cayman Islands who are making a decent amount of profit can hold those earnings offshore tax-deferred. As long as those earnings are held within your corporation you won’t be required to pay US taxes.
This activity is what many confuse as being illegal and a tax scam. Everything that I just mentioned is completely legal. The corporation will be legally able to function in the Cayman Islands and take advantage of the tax incentives they have in the island.
What is completely illegal and should never be done is to open a shell corporation in the island and open fake bank accounts. This is what businesses are doing that are costing the United States millions in taxes.
The government of the Cayman Islands is more than happy to allow you to open your business inside their country the legal way. The Cayman Islands is doing everything they can to stop people thinking of them as a tax-evading scheme.
Like every other country in the Caribbean, the Cayman Islands offers certain incentives to any business entering the country. The difference is that there needs to be a physical presence in the country.
For the past few years, the Cayman Islands have loosened their restrictions on giving foreigners residency permits to be able to work on the island. This is necessary as opening a business inside the country requires you to bring some of your staff.
Another part that we haven’t mentioned is that you and your workers need to qualify for the Foreign Earned Income Exclusion. We will go more into details about what this means in the next article, but in layman’s terms, it means that you can earn up to $101,300 in salary from your Cayman corporation tax-free in the United States.
Opening a business in the Cayman Islands is a fantastic way to put your Startup on the map and avoid the usual obstacles. Please send us a message and we will guide you through the whole process and help you set up your corporation almost immediately.
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In today’s article, we talked about moving your business to the Cayman Islands, the taxes in the Cayman Islands, and the tax laws in the Cayman Islands. For more information, or for assistance with any second residency program, please contact us HERE Thank you.