30
Legal Expert Board
JULY 2013
Offshore Companies Cayman Islands
Continuing with our focus on offshore companies and the benefits and challenges involved, Lawyer Monthly speaks to Robert Searle, a partner with Campbells, a well-established Cayman Islands law firm.
Please introduce yourself and firm.
Having recently celebrated its 40th anniversary, Campbells offers a full range of offshore financial services and is positioned as the leading independent law firm in the Cayman Islands. Campbells provides time-sensitive advice to a range of institutional and high net worth clients with particular focus on investment funds, insurance business, international holding structures, asset finance, listing and M&A – along with an experienced suite of dispute resolution and insolvency litigators who are regarded as cutting edge, having been involved in most of the recent important decisions in the Cayman courts concerning financial services.
What are the main benefits for companies choosing to invest in offshore jurisdictions?
For many years, the Cayman Islands has been a pre-eminent jurisdiction for the establishment and maintenance of investment vehicles for international investors. The combination of evolutionary legislation and practical physical registry services has given investors confidence that structures will achieve the desired regulatory and taxation consequences.
Benefits of the Cayman Islands’ include:- - Cayman does not impose any taxation of its own on Cayman vehicles,
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avoiding taxation “leakages” for investors from multiple jurisdictions
- Geographical and time zone proximity to Europe and the USA and other major financial centres
- A sophisticated world-class professional and banking infrastructure
- Highly trained professionals, usually with experience working onshore in large firms
- Adherence to global requirements imposed by multilateral agencies on tax information exchange and anti-money laundering
- Effective rule of law monitored by experienced judges in an English- derived common law system.
offshore companies have long been a popular option for businesses making the most of attractive tax, financial and legal frameworks around the world. However, the recent global financial crisis has led to several legislative attempts recently by governments globally, aiming to limit the benefits that are available to companies looking to take advantage of such opportunities. In your opinion, what do you think was the most important legislative change for this sector?
Due to growing attention on maintaining tax revenue bases for large onshore nations, the OECD and other agencies have focussed on drawing attention to offshore jurisdictions’ efforts to implement
anti-money laundering procedures and entering into bilateral tax information exchange agreements (TIEA) with onshore nations. The Cayman Islands signed its first TIEA over a decade ago and was well placed to execute TIEAs with many countries quickly and to comply with best practice international standards. Given the institutional nature of many clients of Cayman Islands’ based service providers, adherence to such requirements is desirable to give comfort that the reputation of Cayman will stand strong going forward.
What are the main legal implications that companies should be aware of when looking to invest in your jurisdiction?
Apart from seeking qualified legal local advice, some of the main considerations are:-
a)The appropriate structure available for incorporation and registration. The Cayman Islands has established multiple options which mirror the major options available in onshore jurisdictions. An exempt company is the most popular vehicle, but a segregated portfolio company which enables ring-fencing of assets in differing portfolios is proving popular for investment funds and insurance companies;
structures are also available.
limited partnership
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