Offshore Banking & Finance
The Caymans is a British overseas territory and opening a Cayman Islands bank account is a good way to keep your money in a jurisdiction with financial stability & privacy for business owners and individuals. It also helps you save on taxes through both a personal account or a corporate account. Wealthy people and businesses like Cayman banks because they are in a tax haven, they protect personal information and offer access to international markets.
This guide will tell you why Cayman Islands banking is a strong proposition, how to open a bank account in the cayman islands, and what types of accounts you can access. We’ll also talk about access to investment product like hedge funds, online banking, and foreign exchange. It’s easier than you think!
Where to open an international bank account?
Many people choose Grand Cayman because it is where some of the most established financial institutions are based and here are some of the benefits of a cayman islands bank account:
Privacy and Safety
- There is no income tax, capital gains tax, withholding tax or personal tax charged on money earned outside of Grand Cayman as one of the key features is tax neutrality.
- Account holder information is on a 'need to know' basis
- Complete privacy for both personal and business bank accounts
Good for Wealthy People and Businesses
High-net-worth individuals (HNWIs) like foreign banks because they can move money around easily.
- Suitable for international businesses, but not exclusive to them as they are accessible to individuals from all over the world such as the United States, United Kingdom & even to residents of the Cayman Islands.
- Offshore bank accounts help you do international transactions without paying a lot of fees.
Easy Online Banking and Credit Cards
- You can manage your money using online banking seamlessly.
- Many will give you a credit card with your account which you can use with most ATM networks.
- You can also open savings accounts to access a higher interest rate.
- Online banking lets you check your money anytime from anywhere.
Types of Cayman Islands Accounts
- Personal: For regular people to keep their money.
- Corporate: For offshore businesses that need to send and receive payments.
- Private: For wealthy people who want access to reputable banks, asset management & investment services.
- Investment: To buy things like stocks, real estate, mutual funds, investment funds or to access wealth management / financial management.
- Savings: To save money and get interest.
- Multi-Currency: Easy access to foreign exchange.
- Offshore: For people who want to keep money outside their home country.
How to Open a Cayman Islands Bank Account
- Choose From A Variety Of Local Banks
- Whether you are looking for a bank to go alongside a company formation or for personal banking, there is an abundance of choices.
- Get Your KYC Ready
- You will need a notarised passport or ID, proof of address, source of funds, a reference letter from your current bank.
- For offshore companies you will need full notarised corporate documents such as certificate of incorporation, memorandum and articles of association, certificate of incumbency, register of members, register of directors, ultimate beneficial owner declaration, share certificates and bank references if you have an account already.
- Follow the Rules
- Each bank may have different requirements but generally they follow anti-money laundering guidelines
- Stay up to date with rules set by the local monetary authority which is Cayman Islands Monetary Authority
- On the application form you must give a genuine reason as to why you are setting up the account.
- Fill Out the Application Form
- Write your personal information on the form and send it with your KYC & any additional documents requested such as an employment letter or work permits for example.
- Wait for Approval
- It can take a few days, a few weeks or sometimes a few months for your new account to get approved.
- When approved, you get your account info and online banking access.
Cayman banking offshore account providers
PROVEN BankRBC Royal Bank (Royal Bank of Canada)Cayman National BankCIBC FirstCaribbean International Bank- Butterfield Bank
These banks have offices in key locations such as George Town or Camana Bay.
Costs and Fees
- Initial Deposit: Usually $2,500 to $250,000, depending on the financial institution.
- Initial Set Up Fee: $300 to $2500 depending on the financial institution.
- Annual Fees: Around $500 to $5,000 per year.
- Currency Exchange Fees / Foreign Exchange Fees.
- Debit Card Fees: There will likely be either an annual or monthly cost which ranges from $10 to $100.
- Credit Card Fees: There will likely be either an annual or monthly cost which ranges from $10 to $100.
- Online Banking Fees: Some will charge for using their apps however this is uncommon.
Things to Watch Out For
- You need to prove where your money comes from through financial statements.
- You must adhere to local tax laws and report your account if required to do so.
- Always gain tax advice to avoid being at the mercy of direct taxation in your home jurisdiction.
Should You Open One?
A Cayman Islands bank is a strong proposition if you want to save on taxes, keep your money safe, gain access to reputable offshore trust providers, or do international transactions. Just pick the right one and follow the rules that they set.
If Cayman Islands isn't right for you then there are other options like a Hong Kong, alternate Caribbean Islands or Swiss Banks and many others...
Easy Way to Use Cayman Trusts and Bank Accounts for Investments
If you set up a trust company in the Cayman Islands and link it to an account, you can keep your money safe, do smart investments, and know that your money is protected.
Why Bother with a Trust and Bank Account?
- Keep Your Money Safe: You make a trust company that holds your assets in a trustees name therefore removing the asset / capital from your personal holdings. This way, your money is outside of personal holdings and is therefore not considered an asset of yours from a legal perspective.
- Send Money Anywhere: You can do wire transfers from your offshore bank account.
- Hold Various Currencies: A lot of Cayman bank accounts let you have a foreign currency account. That means you can hold almost any currency.
- Make Your Money Grow: You can put some of your cash in a term deposit account, which means the bank holds it for and you can live off of or accrue the interest.
- Good for US Citizens Too: Even if you’re from the US, you can open bank accounts here. You still have to pay taxes, but it helps manage your money better, especially if you’re investing abroad.
- Easy Access with a Chequing Account: You can also get a chequing account that lets you take out money whenever you need it.
How to Use This for Investing:
Once your trust has a bank account, you can start investing. Here’s how:
- Hedge Funds: These can be risky investments.
- Mutual Funds: These can be risky investments.
- Private Equity: Investing directly into unlisted businesses.
- Term Deposits: Hold your money in an account and accrue interest.
- Chequing Account: Use this if you are going to be regularly accessing your capital.
*FACT*: The Cayman Islands have just under 120,000 active companies on their registry (119,128 as of end 2022) caymancompass.com despite a small population – reflecting its status as a top corporate haven. It’s the domicile for ~70% of global hedge funds by assets, with over 29,000 funds registered locally managing almost $2 trillion jtcgroup.com In 2017, about 85% of the world’s hedge funds were reportedly Cayman-domiciled, due to the islands’ neutrality and expertise in fund administration. internationalfinance.com
***It is very important to read the information sheet and to understand the market your investment is going to be invested into prior to investing. Seek financial advice if you are uncertain. ***
Example:
Let’s say you’re a US citizen and want to keep your money safe and make it grow. You make a trust company in Cayman, then open a bank account for it, this removes it from your personal holdings as it is held with a trustee. You use wire transfers to put in cash from your regular bank. Some of it goes into a term deposit to accrue interest, some stays in a chequing account for daily payments, and some goes into hedge funds for riskier investments and possibly higher returns. Plus, having a foreign currency account keeps you from losing money if exchange rates change.
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