What is Sole Small Business Ownership in the Cayman Islands?
Trying to figure out what sole ownership is defined as in the Cayman Islands? We’ve got some general information for you that should help you decide if this is the right type of small business structure for you. Loosely defined, sole ownership is defined as any individual that is operating a commercial business in his or her own name and at their own personal responsibility. This sole proprietor then, is liable with all of their personal assets at stake. Their liability for debts is not limited – such as in the case of and LTD. There is no legal discrimination between the person and the business. There also exists no minimum capital or the need for articles of association. There will be some licensing required and that will depend on the type of business operations you are engaging in. There are also relatively few legal formalities and far less annual fees compared to other business structures. You will have to obtain a Trade and Business license (typically referred to as a T&B) and due to the nature of the Cayman Islands immigration laws only a Caymanian citizen will be able to operate a business as a sole owner. Expats can work for a sole owner but they cannot be one if competing in the domestic Cayman Islands market.
What types of licenses are available for a Sole Owner in the Cayman Islands?
We always recommend speaking to a knowledgeable professional or attorney when setting up a solely owned company but in general terms if a business is at least sixty percent owned by a Caymanian or Cayman National then the sole owner simply needs to apply for the aforementioned T&B license and pay the processing fee. If your business is less than sixty percent Caymanian owned then a LCCL (Local Companies Control Law License) will be required. In this instance the Trade & Business Licensing Board will look at the foreigner’s business and they will determine if your solely owned business will compete with locally owned businesses. They will also assess the level of benefit your proposed new business will bring to the Cayman Islands and make their determination based on these and other criteria. Additionally, sole businesses that operate mostly off-island, or internationally, will not need to apply for the LCCL and simply require a standard Trade and Business license.
How do I apply for Sole Ownership for my Small Business?
Applying for sole ownership for your small business is a pretty simple and straightforward process here in the Cayman Islands. We have put together a quick checklist for you below to assist in the process. As we mentioned earlier, it is definitely wise to sit down or speak with a knowledgeable professional or accredited attorney before undertaking the process. Sometimes a simple chat with a professional can uncover things you may have missed or may shed light on things you overlooked when you first considered opening up your business. In general, though, these things should get you started on the right path:
- The first step will be to complete the online application form. This form here is also extremely useful.
- Next step is paying the filing/administrative fee (non-refundable). This is CI$75.00 directly to government.
- You will also need to assess and pay license fees as determined from the Schedule of Fees.
- Show your Caymanian citizenship or status proof (Birth Certificate or Status Letter) or for the LCCL you will need to go through that process as mentioned above.
- Get together and submit the lease agreement copy or letter of intent (if the proposed business will be conducted from a commercial location).
- Obtain a permission letter (if the applicant works for the Government of the Cayman Islands).
- Obtain your police clearance certificate from the place where you have lived for the previous six months. Police certificates may be applied for at the DCI licensing counter when your application is submitted.
Once you have submitted the proper documentation and paid the requisite fees the license should be granted provided everything you have given is in good order. Most of the people processing your application will be friendly and willing to help so don’t hesitate to ask them questions!
Becoming a sole owner of a Cayman Islands small business can be an exciting endeavor. A true adventure that can open up a wealth of opportunity and experience. If we can be of any assistance in answering questions about sole ownership small businesses in the Cayman Islands please feel free to contact us.