How to Get Cayman Islands Residency and Pay Zero Tax

Choosing where you want to live is undoubtedly one of the most essential parts of your tax, business and lifestyle strategy.

If your goal is to minimise or even eliminate your tax burden, few places compare to the Cayman Islands. 

As a renowned tax haven, the Cayman Islands offer a hassle-free path to residency with no income, property or company taxes.

This British Overseas Territory not only provides high-quality legal services, healthcare and education but also boasts unbeatable beaches and a luxurious lifestyle.

But what are the benefits of living in the Cayman Islands? How do you get Cayman Islands residency? Who is it a good option for? 

Let us guide you through everything there is to know about the benefits of living in the Cayman Islands, the steps to obtaining a residence permit and why it might be the ideal choice for discerning individuals looking to maximise their financial freedom.

The Benefits of Living in the Cayman Islands

Choosing the Cayman Islands as your second residence offers several unique advantages that cater to high-net-worth individuals. 

From favourable tax policies to a luxurious lifestyle and robust legal framework, this tropical paradise provides everything you need to enhance your quality of life while optimising your financial strategy.

Tax-Friendliness

The main reason the Cayman Islands gets so much attention in offshore circles is the country’s tax-friendly policies: there’s no income, property or company tax. 

So, you could feasibly move to the Cayman Islands, get a residence permit, become a tax resident and reduce your tax burden to zero.

Live the Caribbean Lifestyle

The Cayman Islands is one of the best places to take up a second residency if you enjoy beautiful island landscapes. With a warm climate year-round, it’s an ideal getaway to escape long winters.

Due to the large numbers of wealthy vacationers and expats who visit, the Cayman Islands offer services catering to those communities.

That means you’ll find high-quality private hospitals and schools and excellent, high-end shopping, entertainment and dining options.

Unlike more remote islands like Vanuatu, it’s relatively easy to travel to and from the Cayman Islands.

They’re only an hour from Miami by plane and boast two international airports. If you need to return to the US or Canada every now and then, you won’t need to worry about long, expensive flights.

Overseas Territory Status

As a British Overseas Territory, the Cayman Islands offers residents and citizens political, economic and legal stability that can be difficult to find in similar locations in the Caribbean or Latin America.

The Cayman Islands are highly developed and offer world-class healthcare, education and other services.

The local currency, pegged to the US dollar, is highly stable and the government takes extra care to protect its citizens’ and residents’ assets.

The legal system in the Cayman Islands is also solid and reliable. Combined with the Cayman Islands’ tax-friendliness, this stability has enticed several banks and Fortune 500 companies to establish bases there, a testament to the Islands’ reputation as a haven for business and wealth.

While things can occasionally move on island time, you won’t have to deal with the bureaucracy typical in other parts of the Caribbean.

How to Get Cayman Islands Residency

Ready to pack your bags and move to the Cayman Islands?

Here’s some good news: getting a Cayman Islands residency is straightforward.

However, while becoming a resident of the Cayman Islands isn’t too difficult, it does come at a significant cost. If you want to move there and become a resident, be prepared to spend over US$1 million. 

The most popular ways to obtain residence by investment in the Caymans are through company formation or by investing in the purchase of real estate on the island. 

It’s possible to qualify for residence, which can offer a path to naturalisation and eventual citizenship by:

• Forming a company in the Cayman Islands and employing yourself
• Purchasing a property in the Cayman Islands worth at least US$1.2 million
• Purchasing property worth at least US$2.4 million if you want a path to citizenship.

We’ll explore your options below in more detail.So, let’s explore these options in more detail. 

Cayman Islands Residence by Real Estate Investment

There are two residency-by-real-estate-investment options in the Cayman Islands.

Aside from the monetary value of your investment, the biggest difference between these two options lies in your ability to work while residing in the Cayman Islands and the question of whether you’re eligible for citizenship.

Here is a breakdown of each option:

Option 1: 25-Year Residency Certificate

For an investment of US$1.2 million in local real estate, you can qualify for a 25-year residency certificate. 

This option is ideal for those who desire a long-term residence without the need to work or pursue citizenship.

• Investment Amount: US$1.2 million
• Residency Duration: 25 years
• Work Rights: does not permit the right to work
• Path to Citizenship: no path to citizenship via naturalisation
• Physical Presence Requirement: minimum of 30 days per year
• Main Benefits: low physical presence requirement.

Option 2: Permanent Residence

Alternatively, you can qualify for permanent residence with an investment of US$2.4 million in local real estate. 

This route offers more extensive benefits, including the possibility of applying for the right to work and eventually obtaining a British Overseas Territory passport.

• Investment Amount: US$2.4 million in local real estate
• Residency Duration: permanent residence
• Work Rights: permits the right to apply for work
• Path to Citizenship: eligible to apply for naturalisation and a British Overseas Territory passport after five years
• Main Benefits: visa-free access to 150 countries as a British Overseas Territories citizen; ability to visit the United Kingdom for up to six months without a visa (does not confer the automatic right to live or work in the UK).

With either of these real estate investment options, there are no annual property or capital gains taxes and you can acquire more than one property to meet the investment amount.

Moreover, the property purchased can be rented out to other residents without having to pay a tourist tax, offering additional income potential.

Expect to pay vendor fees of 0.45% of the purchase price and a government fee of US$1000.

Cayman Islands Residence by Company Foundation

Starting a company in the Cayman Islands grants permanent residency and can eventually lead to citizenship. Here is a quick overview of this Cayman Islands residency option.

• Setup Time: approximately five weeks
• Physical Presence: not required during the setup process
• Employment Requirement: must have at least one employee, which includes yourself
• Work Permit: required after forming the company.

One key benefit of this option is that no specific investment is required. However, one-off company formation costs start at around US$15,000 and maintenance fees will set you back around US$6000 a year.

Depending on your needs, various types of business entities can be formed. Additionally, the company owner is not required to spend time in the Caymans while employees, including yourself, can be based on the island or in any other country.

There are three steps to incorporate your business in the Cayman Islands:

• Through a local attorney or corporate services provider
• Apply for a trade licence and work permit via an online portal
• Registration with local health insurance and pension provider.

The primary benefit of company formation in the Caymans is that there is no direct taxation there – no corporate tax, capital gains tax, profits tax or wealth tax. 

Its legal system is based on British law and is internationally recognised. On top of this, it has a robust compliance regime and world-class infrastructure. 

Cayman Islands Residence by Substantial Business Presence

When you invest in a Cayman Islands business or are employed in senior management, you may be eligible to apply for a Cayman Islands Residency Certificate through ‘Substantial Business Presence’.

To establish this presence, you must:

• Ownership: You must own at least 10% of shares in a business within an approved industry (primarily financial and legal services).
• Senior Management: Alternatively, you can establish a ‘Substantial Business Presence’ if your employer can verify that you work in a senior management position.

Qualifying individuals receive a 25-year renewable residence permit and the right to work in the Cayman Islands.

However, there is a physical presence requirement. You must reside in the Caymans for at least 90 days per year.

Key factors to consider regarding this Cayman Islands residency option:

• Application Fees: US$1,220 application fee
• Activation Fee: US$6,100 for the residence permit
• Additional Costs: US$1,200 per dependent, plus varying annual work permit fees based on industry and employment capacity.

This pathway offers substantial benefits, including a renewable residence permit and work rights, making it an attractive option for qualified investors and senior managers.

Getting Cayman Islands Citizenship

When deciding whether to get a second residency, one issue you should always consider is whether you’ll eventually be able to obtain citizenship in that country.

In the Cayman Islands, you can obtain British Overseas Territories citizenship if you acquire permanent residency first. Other qualifications include:

• Living in the Cayman Islands for the majority of the past five years
• Not leaving the Islands for more than 90 days at a time
• Having a clean police record.

Therefore, if you’re willing to establish permanent residency and live in the Cayman Islands for five years, then you can become eligible to apply for citizenship by naturalisation. 

However, depending on your chosen route, this can come at a substantial cost. 

Cayman Islands Residency by Investment: FAQs

Is Cayman Islands Residency the Right Option for You?

Cayman Islands residency offers numerous benefits, including a favourable tax environment and a high quality of life.

However, it’s not suitable for everyone.

The initial investment for residency is substantial, reaching into the millions and, on top of that, the cost of living is high as most goods are imported.

Cheaper second-residence options are available in other Caribbean islands, Asia and Eastern Europe, often for less than US$100,000.

Still, despite the costs, Cayman Islands residency can be advantageous for those who can afford it.

For example, US citizens with significant passive income could benefit from this residency as part of a broader strategy to renounce US citizenship and lower their tax burden.

Ultimately, whether Cayman Islands residency is right for you depends on your unique needs and circumstances. While island life is appealing, there may be better options, and we can help you find them.

At Nomad Capitalist, we specialise in helping seven- and eight-figure entrepreneurs and investors create bespoke strategies tailored to their goals. 

Our global network of experts, including lawyers, estate agents, accountants and tax specialists, ensures that your plan is comprehensive and effective. Discover how we do things here.