A Cayman company refers to an offshore company registered in the Cayman Islands. The Cayman Islands is a British Overseas Territory located in the Caribbean region, known for its flexible legal and tax system. Here are some possible explanations as to why the Cayman Islands are attractive for company registration for large companies such as Alibaba, Tencent, and Meituan:
Tax advantages: The Cayman Islands is a zero or low tax jurisdiction, with no profit tax, capital gains tax, inheritance tax, or value-added tax. This allows companies to operate and manage their global business at a lower tax rate and maximize profits.
Confidentiality and privacy protection: The laws in the Cayman Islands protect the privacy of companies and their shareholders. Information about registered companies is not disclosed to the public, and only a few authorized individuals can access this information. This is highly attractive for some companies, especially when it comes to business secrets and asset protection.
Flexible legal environment: The legal system in the Cayman Islands is based on English common law and has relatively simple and flexible regulations. This allows companies to have flexible structures and management arrangements according to their needs and strategies.
Global recognition: The Cayman Islands enjoy a good reputation and recognition worldwide. Many international financial institutions and investors are familiar with and trust the legal and financial system of the Cayman Islands. This provides additional confidence and opportunities for large companies operating in the international market.
It is worth noting that although the Cayman Islands have the above advantages, choosing to register a company there is not solely for tax planning and confidentiality. Companies may also consider other factors such as global business expansion, investment and financing flexibility, legal and political stability, etc. The decision factors for each company may vary, so the specific reasons why these large companies choose to register in the Cayman Islands may differ.