company law in the Cayman Islands
The continuation of foreign companies transferred to the Cayman Islands
By Part XII of the Companies Law (2013 revision) (the "Companies Law"), a foreign company may apply to the Registrar to be registered and continue its existence as a Cayman Islands exempted company. The process is often referred to as redomiciliation, corporate migration or transfer.
Certain formalities are required for an eligible transfer under the Law, which can be summarised as follows:-
(a) The law of the jurisdiction in which the Applicant company (the “Applicant”) is incorporated/registered/existing must permit or not prohibit the transfer of the Applicant in the manner provided by the Companies Law;
(b) The Applicant’s name must be acceptable to the Registrar according to the Law;
(c) The Applicant must have been constituted in a form or substantially a form which could have been incorporated as an exempted company limited by shares under the Companies Law;
(d) The Registrar is not aware of any other reason why it would be against the public interest to register the Applicant; and
(e) the Applicant is not intending to carry out its business in the Cayman Islands.
In addition to supplying the Registrar with the Charter Documents as set out in Section 184 of the Companies Law, and requisite registration fees, a director of the Applicant will need to file a Declaration to the Registrar confirming:
(a) no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the Applicant in any jurisdiction;
(b) it does not have a receiver, trustee, administrator or other similar person appointed in any jurisdiction and be presently acting in respect of the Registrant, its affairs or its property or any part thereof;
(c) it has not entered into or made any scheme, order, compromise or other similar arrangement in any jurisdiction whereby the rights of creditors of the Applicant are and continue to be suspended or restricted;
(d) it is able to pay its debts as they fall due;
(e) the application for registration is bona fide and not intended to defraud existing creditors of the Applicant;
(f) any consent or approval to the transfer required by any contract or undertaking entered into or given by the Applicant has been obtained, released or waived, as the case may be;
(g) the transfer is permitted by and has been approved in accordance with the Charter Documents of the Applicant;
(h) the laws of the relevant Jurisdiction with respect to transfer have been or will be complied with; and
(i) it will, upon registration, cease to be incorporated, registered or exist under the laws of the jurisdiction of incorporation.
Further, the Director is required to file an Undertaking that notice of the transfer has been or will be given within 21 days to the secured creditors of the Applicant and, a statement of the assets and liabilities of the Applicant made up to the latest practicable date before making the declaration, should be provided.
Registration and Effect
Upon registration under Part XII, the Registrar will issue a certificate that the registrant is registered by way of continuation as an exempted company. From the date of registration, the company shall have the capacity to perform its full function and obligations under the Companies Law.
It should be noted that such continuation does not operate to create a new legal entity:
(i) the company remains liable for all previous debts, liabilities and obligations that existed prior to its continuation;
(iii) no conviction, judgment, ruling, order, claim, debt, liability or obligation due or to become due, and no cause existing, against it or against any of its shareholders, directors, officers or agents, is released or impaired by its continuation;
(iii) no proceedings, whether civil or criminal, pending by or against it, or against any of its shareholders, directors, officers or agents are abated or discontinued by its continuation, and the proceedings may be enforced, prosecuted, settled or compromised by or against it or against the relevant shareholder, director, officer or agent.