Law and Taxation
Company's law in the Cayman Islands is based on English common law. There are two types of Cayman Islands companies: the Exempted and the Non-Resident. The ongoing licence fees for a Non-Resident Company are slightly less than for an Exempted Company but they must submit a more detailed annual return and as such, have not gained great favour in Asia. The Cayman Islands received a Royal decree in 1798 that would free them from taxes forever and this decree remains in force. Exempted Company names do not have to end with the suffix 'Limited', and such companies may apply for a 20 year tax exemption certificate, further enhancing their tax exemption status. The company name may also be expressed in Chinese characters, so long as its English translation is provided.
In November 2001, a new agreement with the United States (US) for the exchange of information was signed. This provides for the exchange of information, upon request, for criminal tax evasion, civil and administrative matters relating to US federal income. The agreement applies to criminal tax evasion for taxable periods commencing 1 January 2004, and to all other tax matters for taxable periods commencing on 1 January 2006.