Exempted company formation, holding and fund structures under a tax-neutral, common-law framework — for Indian promoters raising international capital, holding overseas investments or planning a future listing.
The Cayman Islands is the leading jurisdiction for international investment funds and a preferred holding location for companies that intend to raise money from global investors or list overseas. Cayman has no corporate income tax, capital gains tax, withholding tax or inheritance tax, and an exempted company can obtain a government undertaking that no such taxes will be imposed on it for 20 years (30 years for certain vehicles). The legal system is English common law, the courts are highly regarded and the regulator, CIMA, supervises funds and financial businesses to international standards.
Cayman is not a light-touch jurisdiction. Every exempted company must have a registered office with a licensed provider, file an annual return and pay an annual government fee, maintain beneficial ownership information under the Beneficial Ownership Transparency Act 2023, and comply with the International Tax Co-operation (Economic Substance) Act — which requires companies carrying on “relevant activities” (holding company business, fund management, financing, headquarters, distribution and service centre, IP business, shipping, insurance and banking) to demonstrate substance in Cayman or to be tax-resident elsewhere. Pure equity holding companies are subject to a reduced test. Cayman was removed from the FATF grey list in October 2023 and from the EU AML high-risk list in 2024.
We work with licensed Cayman registered office providers and fund administrators and manage the Indian ODI, valuation and reporting requirements so that your Cayman structure is defensible from the outset.
| Item | Position |
|---|---|
| Corporate / capital gains / withholding tax | None; 20-year tax undertaking available |
| Minimum directors / shareholders | 1 / 1 |
| Formation time | 3–5 working days |
| Annual government fee | From about USD 850, scaled to authorised capital |
| Economic substance | Required for relevant activities; reduced test for pure equity holding |
| Audit | Not required for unregulated companies; required for CIMA-registered funds |
The standard vehicle for international business: one director and one shareholder minimum, no requirement to file accounts publicly, may not trade within Cayman except in furtherance of overseas business. Used for holding companies, SPVs and listing vehicles.
An exempted company whose assets and liabilities are legally ring-fenced in separate portfolios — used for multi-strategy funds and structured transactions.
The usual form for private equity and venture capital funds, with a general partner (often a Cayman exempted company) and limited partner investors.
A hybrid vehicle with members and an operating agreement, similar to a Delaware LLC, used for joint ventures and manager vehicles.
A company without members that can hold assets for purposes or beneficiaries — used in wealth planning and digital-asset structures.
Mutual funds (open-ended) and private funds (closed-ended) registered with CIMA, requiring an administrator, auditor and, for private funds, valuation and safekeeping arrangements.
We define the ownership chain, the economic substance classification, whether CIMA registration is needed and the Indian ODI route (including any valuation requirement).
Due diligence on all directors, shareholders and beneficial owners by the licensed registered office provider.
Memorandum and Articles filed with the Registrar of Companies; Certificate of Incorporation issued. Tax undertaking certificate applied for.
Registers of directors, officers, members, mortgages and beneficial ownership; first board resolutions; economic substance notification; FATCA/CRS registration where applicable.
Account opening with an international bank; for funds, appointment of administrator, auditor and legal counsel and CIMA registration.
The Indian side of an overseas structure
For Indian resident promoters, setting up abroad is only half the job. Depending on how the entity is owned and funded, you may need to comply with the Overseas Investment Rules, 2022 (Form FC filing through your AD bank, a Unique Identification Number and an Annual Performance Report), the Liberalised Remittance Scheme limit of USD 250,000 per person per financial year, Place of Effective Management (POEM) rules that can make a foreign company tax-resident in India if it is controlled from here, transfer pricing on transactions with your Indian business, and Schedule FA disclosure of foreign assets in your Indian return. We build these into the plan from the start.
Cayman is tax-neutral, so investors from different countries are not taxed twice at the holding level, its corporate law is flexible and familiar to global law firms, and exchanges such as NASDAQ, NYSE and the Hong Kong Stock Exchange accept Cayman companies for listing. Most international venture capital and private equity term sheets for Indian-founder businesses expanding globally assume a Cayman, Singapore or Delaware holding entity.
A pure equity holding company — one that only holds equity in other entities and earns dividends and capital gains — must meet a reduced test: comply with the Companies Act and have adequate people and premises in Cayman for holding those shares, which the registered office provider usually satisfies. Companies carrying on other relevant activities must show that core income-generating activities are directed, managed and performed in Cayman, or demonstrate tax residence in another jurisdiction.
Yes, under the Overseas Investment Rules an Indian company can invest in a foreign entity engaged in a bona fide business activity, subject to the financial commitment limit of 400% of net worth under the automatic route. Investment in a foreign entity that itself invests in India (round-tripping) and in offshore funds requires specific analysis, and a valuation is needed where the investment exceeds the prescribed threshold.
Cayman is a premium jurisdiction. A simple exempted company with registered office, annual government fee, beneficial ownership and economic substance compliance typically costs several thousand US dollars per year; regulated funds cost more because of administration, audit and CIMA fees. We provide a full cost schedule before engagement.
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