Cayman Islands

Tax System Overview

The Cayman Islands is the premier offshore financial center, largely due to its absolute lack of direct taxation. It is the jurisdiction of choice for hedge funds, private equity, and structured finance.

Corporate & Personal Taxation

The Cayman Islands levies:

• 0% Corporate Tax
• 0% Personal Income Tax
• 0% Capital Gains Tax
• 0% Withholding Tax

Government revenue is generated entirely through indirect taxation: import duties, stamp duties on real estate, and substantial work permit and corporate registration fees.

Economic Substance Requirements (ESR)

To avoid being blacklisted by the OECD and EU, Cayman implemented strict ESR legislation. Cayman entities engaging in "relevant activities" (e.g., fund management, holding companies, financing) must prove they have adequate physical presence, employees, and expenditure in the Cayman Islands. Holding companies face a reduced test, but must still comply with reporting requirements.