Open a Bank Account in Cayman Islands - 2023 Guide (2024)

Setting up a Cayman Islands company is a simple process and many foreign investors choose to set up a company here. Opening a business bank account is a subsequent step after the formation of the legal entity and individuals and entrepreneurs can choose between the various bank branches that offer their services.

Are you interested in starting a business and opening a corresponding bank account in 2023? Our team will help you throughout the process and will act on your behalf in front of the bank, if needed.

In order to open a bank account in the Cayman Islands for a legal entity, registered either in the Islands or in another location, the applicant will need to provide relevant documentation.

The Cayman Islands offer not only different business advantages, most notably the lack of tax for locally registered companies, but also a high level of banking safety and professional services. The concept of banking secrecy is not necessarily the one understood by many who refer to the Cayman Islands as a tax haven. The Islands have signed a number of bilateral agreements for the automatic exchange of financial information and this is relevant to citizens for signatory states who open a non-resident bank account. The reporting obligations do not apply in case of countries that have not signed this type of bilateral agreement.

How to open a business bank account

The steps briefly described below apply to most business owners who open a bank account in the Cayman Islands:

1. find a bank: there are several available options in the Cayman Islands and you can choose based on fees, the number of branches and ATM, special offers and others.
2. ask for special requirements: some banks may require special documents from the home country that also has an apostille; one of our agents can help you during this step.
3. prepare the company documents: these will include the certificate of incorporation, the articles, and memorandum of association and the financial statements, business plan, annual report, auditor’s reports, etc.
4. prepare the beneficial owner’s documents: passport copies and information about the residential address.
5. references: in some cases, professional references from previous banks or from an accounting or law firm may be required.

When the business of the company takes place in the Cayman Islands, a copy of the Trade and Business License will be required. A certificate of good standing will also be required for companies that are older than one year. The bank may require that the company documents are certified by a notary public.

Bank accounts can be opened by e-mail in most cases. The company directors can be involved in the process, however, one of our agents who specialize in Cayman Islands incorporation can handle this step as part of opening a company. Non-residents who wish to open a bank account in Cayman Islands for personal purposes apart from the one used for their registered business in the Islands can talk about this matter with one of our banking specialists.

Bank account opening is an essential step for the set up of a Cayman Islands company. If you require specialized assistance or pre-incorporation counsel, our company formation agents can answer any questions. Banking matters have significant importance and implications, however, foreign investors interested in offshore company formation can also find out other important details from our experts.

Banking fees in the Cayman Islands

Bank commissions in the Cayman Islands will include those related to the maintenance of the account, fees for wire transfers, those for issuing a debit or credit card and different other fees. The account can be opened in any international currency. A minimum deposit can be required.

For the purpose of transparency, the Cayman Islands Monetary Authority provides a summary list of the common fees. The one available on 1 November includes the following fees for retail banking:

• cheque cashing: 1.25 CI$ to which the Government stamp duty is added charged by Butterfield Bank Limited; other banks, like Cayman National Bank, do not charge this fee;
• international cheque deposits: 10CI$ at the Butterfield Bank Limited and 8.40CI$ at the Cayman National Bank;
• cash withdrawals: 1CI$ at the Butterfield Bank Limited, 2CI$ at the Cayman National Bank and 0.,50CI$ at Fidelity Bank;
• cash deposits made over the counter: 0.25 CI$ at the Fidelity Bank and no charge at the Butterfield Bank Limited.

Other operations that are subject to charges include large cash handling, with more than one bank charging 1% of the amount over 5,000 USD, foreign exchange, local or international drafts, incoming and outgoing wire transfers, electronic funds transfers, overdrafts or bill payments.

Please keep in mind that the fees are issued for informative purposes and they are general ones. In practice, banks may change them as they see fit and those who open a bank account in Cayman Islands should check their availability before making a choice that is also based on these fees. ATM card issuance is usually free of charge, however, the subsequent issuance of a card is taxed. ATM withdrawals are also subject to a fee and this is larger if the withdrawal is made at another bank locally or at an international bank.

We invite you to watch a short video on how to open a bank account in the Cayman Islands:

All banks charge monthly maintenance or service fees. As per the data gathered by the Cayman Islands Monetary Authority, in November 2020 the following examples applied for these services:

• Fidelity Bank: monthly maintenance for the savings account 5CI$ and for the chequing account 10CI$;
• Cayman National Bank: for personal accounts, no charge for the savings account maintenance and an 8CI$ fee for the chequing account ; for businesses, the savings account was also subject to a 1CHI$ fee and a minimum charge of 12 CI$ for the chequing account;

Banks reserve the right to calculate the maintenance or service fees for the personal and business accounts (savings or chequing) as per their own policies. For example, the Butterfield Bank Limited charges the corporate chequing account maintenance at a rate of 6CI$ per account if it falls under the required daily balance average of 5,000 $.

Advantages of having a bank account in the Cayman Islands in 2023

The Cayman Islands offer significant advantages in terms of company formation and taxation. The Cayman Islands exempted company is the preferred business form and the one that has the most notable advantages for foreign investors.

Some of the advantages of opening a bank account in the Cayman Islands include the following:

• Completely legal: opening a bank account in the Cayman Islands is legal and it is not associated with an unlawful business.
• Low costs: the costs for the maintenance of the bank account are low, however, they do depend on the chosen bank branch,
• Financial services availability: account holders have access to a large number of financial services and can open foreign currency accounts.
• Banking anonymity: this is granted to citizens of countries that have not signed a bilateral agreement with the Cayman Islands.

The Cayman Islands is part of the Foreign Account Tax Compliance Act of the United States (which reports the activity to the Internal Revenue Service) and also a signatory in a number of bilateral treaties for the exchange of financial information. This means that although the country does retain important tax advantages, however, individuals who open bank accounts are to be regulated as per the treaties in force.

Offshore banking regulations in the Cayman Islands

The Cayman Islands is part of the Foreign Account Tax Compliance Act of the United States (which reports the activity to the Internal Revenue Service) and also a signatory in a number of bilateral treaties for the exchange of financial information. This means that although the country does retain important tax advantages, however, individuals who open bank accounts are to be regulated as per the treaties in force.

The FATCA Guidance Notes are useful for understanding the provisions that apply in terms of reporting. As far as compliance with the United States Regulations are concerned, failure to do so by Cayman financial institution may result in a 30% withholding tax imposed on the US source of income of the said non-compliant institution. As highlighted below by our agents, the majority of the banks in the Cayman Islands are Category B, meaning that they provide services only to clients outside of the Islands (which in many cases may very well be US nationals – making it relevant for the bank or the financial institution to comply with the rules in force).

All Cayman Islands Reporting Financial Institutions and Registered Deemed Compliant Financial Institutions under the US Agreement are required to register with the IRS and obtain the Global Intermediary Identification Number (GIIN). Such registered and compliant financial institutions appear on the monthly IRS FII (foreign financial institutions) list.

The Guidance Notes on the International Tax Compliance Requirements contain different provisions for reporting in case of the United States of America and for the United Kingdom in terms of reporting and non-reporting financial institutions. Investors from the UK and the USA can take note of these differences before they open a bank account in Cayman Islands.

Bank account creation in the Cayman Islands in 2023 observes the rules for anti-money laundering and criminal activities. However, the Cayman Islands remains one of the locations with a solid respect for banking privacy and foreign nationals are able to open an account quickly and in some cases while still being offshore (provided that they send the needed documents and use local services, such as those offered by our agents).

According to the Cayman Islands Monetary Authority, there were more than 100 banks in the Cayman at the end of September 2020. The data presented by our Cayman Islands company formation agents shows the following:

• 123 banks on 30 September 2020;
• 9 category A banks (unrestricted, can do business both in and outside of the jurisdiction);
• 114 category B banks (they can offer services only outside of the Cayman Islands);
• 7 controlled subsidiaries;
• 114 category B banks (they can offer services only outside of the Cayman Islands);
• 7 controlled subsidiaries;
• 4 societies and development banks.

For 2022, the data provided by the Monetary Authority is the following:

• There were a total of 5 money service businesses at the end of the year;
• 11 Class A total banks and trusts and 94 total Class B entities;
• 11 of the licensed banks were of European Region and 10 such banks were from the USA (in Q4 2022);
• 23 banks were from South America and 16 were from Asia and Australia;
• As far as controlled subsidies were concerned, their number has remained constant from 2017 to 2022, at 7 such entities.

One of our specialists in Cayman Islands incorporation can give investors more details on the process of opening a business bank account in 2023 and the requirements for locally registered and non-resident companies.