Cayman Islands Bank Account
A Cayman Islands bank account, especially when held in the proper legal tools, can help protect assets from lawsuits, enhance financial privacy, and, in certain cases, lower taxes. The U.S. has under five percent of the world’s population, yet 80% of the attorneys in the world and 96% of global lawsuits. If funds are held in the U.S. they are directly accessible to U.S. courts. The Cayman Islands banking system includes privacy provisions to keep nosy neighbors out of your affairs.
When you engage in Cayman Islands offshore banking you are taking one step in moving your funds beyond the reach of your neighborhood attorney. That alone, however is not enough. The reason is, if a local judge commands you to return the funds, you would be required to do so. Therefore, it is also necessary to establish the bank account inside of a legal tool such as an offshore LLC and/or asset protection trust. That way, if you are ordered to return the funds, you have a foreign trustee place who can prevent that order from being carried out. Thus you keep out of hot water. An offshore trustee, who is not under the jurisdiction of your local courts is not required to comply with orders made in your county, state or country. More on this later. First, let’s look at a little background of the country itself.
Background of the Cayman Islands
The Cayman Islands, located between Cuba and Central America, are a jurisdiction of three islands that possess a good international reputation. Offshore Banks Directory puts their overall population at over 55 thousand. The Cayman dollar (KYD) currently has a fixed rate with the United States dollar (USD) at 1.00 KYD to 1.20 USD. There are no income taxes in the Cayman Islands. Most of the money that comes into the country comes from tourism, customs payments, stamp duties, and annual business fees. The Caymans have a strong political situation and are considered one of the major offshore banking centers in the world. It has almost 250 accredited banks. Deposits in the banks are worth over 1,600 trillion USD.
Cayman Banks: Trusted Internationally
There are a lot of good reasons that the Cayman Islands banks are so popular. One reason is that they are a trusted international financial center. Appleby cites some of these reasons as a strong reputation, flexibility, central time location, and processing speed. The law of the Islands is taken from English common law and has been adapted for local need. Their court system is well-developed, and The Cayman Islands offshore financial services sector has a compliance culture. That is, it is committed to working with international entities to provide up to date financial services. It also maintains anti-money laundering and anti-terrorist financing regulations in cooperation with the Organization of Economic Cooperation and Development (OECD).
Cayman Islands Banking Secrecy
Banking secrecy is often an important consideration in banking internationally. The Law Office of R.J. Mintz says that Cayman Islands banking secrecy is among the strictest in the world. The trust laws in the Caymans are highly developed and provide a great level of flexibility, protection, and privacy to their account holders. Companies can be formed with a minimum amount of paperwork, and shares through those companies can be held anonymously in bearer form or by nominees.
When a company or individual decides to invest in the Cayman Islands, Appleby goes on to cite that one of the great benefits they receive from that account is tax neutrality. While the Caymans are not tax free or a tax haven, they do not have capital gains or taxes on income, profits, corporation, or withholding. When incorporating within their jurisdiction, exempted companies can obtain an undertaking from the government stating that it will remain tax-free for a 20-year period. Exempted trusts or limited partnership can receive the same statement, but for up to a 50-year period.
Before finding out how many banks are in the Cayman Islands, it is important first to know that there are two classes of banks. Solomon Harris describes these two bank types, marked by either an “A” or a “B” license. An “A” license is granted to a branch or major subsidiary of a major international bank with a net worth of no less than $50 million USD. This license lets the bank provide services both to domestic and international markets.
“B” license banks are broken down into two subcategories: restricted offshore and unrestricted offshore. A restricted offshore “B license” bank only allows service for named non-resident, offshore clients. A holder of this license would need to have a supervised banking entity in another country or a well-established overseas corporate group. An unrestricted offshore “B license”, however, allows non-residents of the Cayman Islands to carry out unrestricted banking anywhere in the world, except for within the Caymans.
According to the Cayman Islands Monetary Authority, there were 11 banks with an “A” license as of the fourth quarter of 2016. The same quarter shows 148 “B” licensed banks. From this Cayman Island banks list, we’ll examine two of the most well-known banks. One is based in Canada and one is based in the Caymans. Both of these banks have their home offices in the country’s capital, George Town, on Grand Cayman Island. The HSBC Cayman Islands, a previous financial power in the Caymans, is no longer in operation.
Internationally-Based Cayman Banks
The Royal Bank of Canada in George Town is part of an international banking system that, as implied by the name, is a branch of a banking system that originated in Canada. The problem is that the Cayman branch will not generally open bank accounts for people who do not live in the Cayman Islands. More pointedly, the Cayman branch will not open bank accounts for US-based. people. According to their website, the RBC has operations in 35 countries and serves more than 16 million clients. They have been recognized on the list Global 100: Most Sustainable Corporations in the World. This annual list is compiled by Corporate Knights, and recognizes global corporations that have been world leaders in environmental, social, and governance issues. Cayman Islands banking interest rates vary by bank, but RBC has a variety of options. Their certificates of deposit vary from an overnight trust to 5-year period. We will not quote interest rates here, as they vary over time.
Many feel that RBC as one of the top financial choices for people who live in the Caymans. RBC specializes in wealth management, custody, brokerage, private banking, fund administration, and trust services.
Locally Based Banks
If you want a bank that is based in the Caymans, you have options. There are banks that will open accounts for people who do not reside in the jurisdiction. You also have banks available that offer corporate, retail, and premier banking. There are also banks that act as a fiduciary and trust advisory, offering fund administration and investment management. Since these banks do not have foreign parent companies, they can operate independently, offering greater flexibility to depositors. Plus they are small enough in size to provide a personal touch to their clients. The interest rates on their accounts for a fixed deposit vary by currency and duration. For example there are fixed deposits in USD from $250,000 to $499,000 with competitive interest rates. These CDs have durations between 7 days and 3 years as of this writing. Naturally, since interest rates fluctuate greatly over time, you can reach out and ask by using the number or form on this page.
Cayman-based banks tend to be most favorable for asset protection purposes. The reason is that local branches of foreign banks have been fined until the bank in the offshore safe-haven coughs up the funds. That is a big reason for using a bank that does not have branches in your home country.
Having your bank account held in an LLC that is, in turn, owned by an asset protection trust is the most secure way to title an offshore bank account. Then you will want to make sure that the offshore bank does not have a branch under the control of your local judiciary. This combination in the Cayman Islands has provided asset protection for a multitude of wealthy business people who are victims of aggressive legal attack.
Opening Your Account
Whether you’re setting up a bank account for financial privacy or just want to protect the assets of your family, non-residents can open an account at most banks in the Cayman Islands without ever visiting them first. If your goal is asset protection, as we have stated it’s a good idea to set up an LLC before beginning the process of creating a banking account. An LLC can serve as an extra layer of protection for you, protecting your identity and shielding your assets from seizure by creditors. One can set up Caymans LLC . Alternatively, the most common place to set up the LLC for a Cayman account is in the Caribbean island of Nevis. So you can set up the company in one country and set up the bank account in another. This both creates an extra layer of security and allows you to use the best jurisdiction suited to your intended purpose.
Several documents are needed to set up a personal account. Some of the documents needed to open a personal account are identity verification documents, a current overseas address, the source of the funds going into the account, and banking reference letters from a current bank, in addition to the application itself. If the account is being created for multiple people, all named parties must be included in the reference letters and identification documents. After setting up an account, some banks will not allow a checking account, but will offer a savings account and a debit card. Most banks do offer easy-to-use online banking platforms.
The Cayman Islands are most well-known for their services to companies, and the process of opening a business account at a bank begins before ever contacting the bank. Any bank or trust company wanting to set up an offshore banking account in the Caymans first needs to incorporate, either within the jurisdiction or abroad.
There are certain documents a Cayman Islands bank will need in order to open a corporate account. Some of this information includes the incorporation paperwork, references from a current bank, identification documents for each beneficial owner, a letter detailing the reason for the account, proof of a current address, and more. All directors, members, and signatories will need to supply all the necessary information for a personal bank account. Shareholders who own more than 10% will also require identification and references. The minimum deposit to open an account is $2,500 KYD, or the equivalent in USD, British Pounds or other preferred currency. The minimum deposit amount can vary from time to time.
Any individual or company has the right to arrange their affairs to keep their assets sheltered from predators as long as they remain in compliance of the tax and other laws of their home country. A bank account in the Cayman Islands can be a good way to take advantage of this advice. Don’t accept the prospect of leaving your hard-earned wealth hanging out there for some hotshot with a legal degree to line his or her own pockets. You can use the number or inquiry form on this page to seek further help on establishing your offshore account in the Caymans and set yourself or your company up for a more secure future.