Owning real estate through a company

As realtors, we are often asked questions about owning real estate in the Cayman Islands through a company. Below are some of the most common questions asked.

Q: Is it possible to purchase and hold real estate in Cayman using a company?

A: Yes. There are no restrictions on companies purchasing and holding one residential property for personal use and up to two additional residential properties as investments to be rented out. If a company owns more than two residential rental properties, then a Trade & Business licence is required.

Q: What type of companies can hold real estate in Cayman?

A: Generally speaking, purchasers of real estate use either a Cayman Islands ordinary company, a foreign company or a Cayman Islands exempted company.

Q: Which type of company should I choose when purchasing real estate in Cayman?

A: Each purchaser will be different and have their own set of requirements but we tend to see purchasers using either a Cayman Islands ordinary resident company or a foreign company when purchasing real estate in Cayman. A Cayman Islands ordinary resident company can, subject to local licensing laws, carry on business within the Cayman Islands and own and lease real estate. The costs of setting up an ordinary resident company vary, but you should budget around US$2,000-US$3,000 for the initial incorporation fees and annual fees in the region of US$1,750-US$2,250.

A foreign company can, subject to local licensing laws, carry on business within the Cayman Islands and own and lease real estate. A foreign company is a company incorporated outside of the Cayman Islands and is useful for those purchasers who already have a company set up in their own jurisdiction and do not want to set up a new company in the Cayman Islands. However, it is worth noting that a foreign company must be registered as a foreign entity in the Cayman Islands. Whilst this is a fairly straightforward process, there are initial and ongoing fees associated with this that are broadly in line with those for an ordinary resident company.

Q: What are the licensing requirements for companies that own real estate in Cayman?

A: As touched upon above, if a company owns more than three residential properties (one of which must be used for personal use), then a Trade & Business licence from the Cayman Islands Government will be required. In addition to a Trade & Business licence, a Local Companies (Control) Law (2019 Revision) ("LCCL") licence will also be required (regardless of who manages the properties) for companies whose ultimate beneficial owners are non-Caymanian. My colleague, Daniel Altneu (Daniel.Altneu@bedellcristin.com), can assist with advising on and applying for both Trade & Business and LCCL licences.

This article first appeared in the February 2021 print edition of Camana Bay Times.

About the author

Michael Sharvin is a senior associate on the real estate team of the law firm Bedell Cristin in Camana Bay.