In the Cayman Islands vs BVI, both jurisdictions are excellent and respected tax-free jurisdictions. It is considered a top alternative if you are considering forming an offshore corporation. Understanding the distinctions between these two jurisdictions is critical since it will ensure that any option you make is the best one. An in-depth comparison of these two jurisdictions is provided below.
Introduction Of Cayman Islands
- The legal system in the Cayman Islands is quite similar to that of the British Virgin Islands.
- Cayman is a top offshore financial hub for global firms and an attractive place of residence for offshore investment funds in terms of the business climate.
- One of the most common business structures in the Cayman Islands is the limited liability corporation (LLC). It may be used for a variety of applications. Investment funds, joint-venture businesses, private equity deals, securitizations, and other similar structures are examples.
Introduction Of BVI
- The BVI is well-known for being one of the most stable jurisdictions in terms of political and economic outlooks.
- It is also one of the world’s most popular offshore jurisdictions.
- According to the International Consortium of Investigative Journalists (ICIJ), 40% of the world’s offshore enterprises choose the BVI to establish their operation.
ARE THERE ANY SIMILARITIES BETWEEN THE CAYMAN ISLANDS AND BVI JURISDICTION?
There are several similarities between these two jurisdictions, which can be seen below:
- There are no corporate taxes or capital controls.
- Individuals are not subject to inheritance or gift taxes.
- System of registration that is both simple and effective.
- Owners’ and stockholders’ information is kept private.
MAIN DIFFERENCES BETWEEN A CAYMAN ISLANDS AND BVI OFFSHORE COMPANY
While there are some similarities between these two jurisdictions, there are a few significant distinctions to be aware of. The following distinctions are as follows:
Secrecy and holding company structure
- People like to establish BVI corporations to safeguard the information of shareholders and the board of directors. When it comes to secrecy, the BVI has the most robust law. Stakeholders may be certain that their information will be secured under the law if they create their firm in the BVI. The BVI International Business Corporations Ordinance 1984 (as modified) grants the companies certain rights and imposes severe secrecy obligations.
- The Cayman Islands, on the other hand, is well-known as a favoured destination for financial laws. With the Cayman Government’s financial license, it will be a smart choice for funds, banks, and affluent people to investigate financial prospects over the border.
Registration process
- The registration requirements to create a corporation in the BVI are less stringent than in Cayman. The process begins with the filing of the Memorandum and Articles of Association (MAA), and articles signed by the proposed registered agent, and ends with the submission of copies of the MAA, articles, and receipt of a Certificate of Incorporation, which typically takes 24 hours in the BVI. Furthermore, the pre-authorized functionality of investment role licenses granted by China, Hong Kong, Brazil, the United States, and the United Kingdom are accepted in the BVI, therefore no further approved functions are necessary.
- For the Cayman Islands, registrants will obtain a certificate of incorporation within five working days, or two working days if an extra service charge is paid to the Cayman government. When the government of the Cayman Islands does not grant pre-authorized functionalities of investment roles, such as managers, administrators, custodians, auditors, that are issued by other countries, investors in Cayman may spend more time, add more legal fees, and incur more expenses to apply for a new regulatory license.
Regulatory framework
- Companies are not required to comply with local audits in the BVI.
- The Cayman Islands requires fund firms to be audited on a local level.
Investors’ preferences
- BVI draws more investors from Russia and Asia, and BVI is not a bad option for small business owners with a limited budget and a primary concern for corporate secrecy.
- Cayman is an ideal location for large corporations looking for investment opportunities in the fund sector or considering using the proposed company as a holding structure in the future, as well as being familiar with many institutional investors from the United States, South America, and Western Europe.
BVI VS CAYMAN – WHICH IS THE BEST OFFSHORE JURISDICTION FOR MY COMPANY?
There is no clear choice as the most suitable jurisdiction will depend on your nature of business and your company’s goals. We highly advise you to seek guidance and advice from competent and experienced professionals, such as those at Relin Consultants. Send us an inquiry at enquiry@relinconsultants.com, and our agents will get in touch with you. We have helped numerous clients in setting up their offshore companies in various jurisdictions, and we wish we can help you as well.
FAQs
Are foreigners allowed to incorporate an offshore company in the Cayman Islands and BVI?
Yes, foreigners are allowed to incorporate an offshore company both in the Cayman Islands and BVI with 100% ownership.
What are the required documents for registration with the BVI Company Registrar?
Among the documents that you will need are:
- Apostille-certified original certificate of incorporation
- A set of Notary and Apostille-certified copies of primary papers
- The Power of Attorney by Notary and Apostille
- An original hard copy of the Certificate of Good Standing from the BVI Public Register
