Background The Cayman Islands are a country of three islands in the Caribbean Sea near Cuba. Its three islands are Grand Cayman, Little Cayman and Cayman Brac. The capital of Grand Cayman Island is George Town. It is a British overseas territory, with an estimated population of 60,000, where English is its official language. The Caymans have been a popular offshore financial centre for wealthy clients for many years. While Cayman LLC is loosely based on Delaware LLC, it is interesting to note that legal traditions are different in both jurisdictions. Section 3 of the LLC Act states that „companies registered on the islands, amended by the Corporations Act and all other laws applicable in the islands, apply to a limited liability corporation, unless these rules and laws or amendments are contrary to the express provisions of that act or to the nature of a limited liability corporation… The LLC must have an LLC agreement (LLC agreement) written by the member or members of LLC with respect to the affairs or affairs of the LLC. Although the LLC agreement may be entered into at any time before, after or on the filing date of the registration statement, it is considered effective on the date of the registration certificate if it is filed prior to the filing of such a declaration. Such an agreement can be characterized as an LLC agreement, an enterprise agreement or some other way.
The registration declaration may serve as an LLC agreement for this purpose. Under the U.S. Tax Compliance Act (FATCA), certain foreign vehicles must disclose to the Cayman Islands Tax Information Exchange Authority the name, address and identification number of certain U.S. persons who, directly or indirectly, are interested in such a vehicle, in accordance with the provisions of an intergovernmental agreement between the United States and the Cayman Islands (IGA), as well as the rules of application and rules adopted by the Cayman Islands. In addition, more than 100 countries have signed the MULTILATERAL Competent Authority Agreement and the OECD`s Common Reporting Standard (SIR) to implement automatic exchange of tax information on the basis of the OECD Multilateral Convention on Mutual Tax Assistance. CRS is similar in the form and substance of the U.S. IGA. It is necessary to evaluate the activities of a limited liability company and classify them as FATCA/SIR, regardless of the location of its activities or members, to determine whether there are reporting and reporting obligations. We advise you on these matters in certain circumstances and will assist you in meeting these obligations by the Limited Liability Company. The introduction of the Limited Liability Corporation (LLC) in 2016 by the Public Companies Act,2016 (the „LLC Law“) has so far proved attractive to general partner companies and other distribution vehicles.
LLC has the advantage of being a separate limited liability company (such as a cayman islands exempt business), but not maintaining capital restrictions for tax-exempt businesses, and therefore has more flexibility in the distribution of income and capital through the terms of the LLC agreement.