1. LAWS AND REGULATIONS FOR BUSINESSES IN THE CAYMAN ISLANDS Presented by Sherri A. Bodden, MBE, LIB (HONS.) Bodden & Bodden Attorneys-At-Law Addressing Start-Up Ventures

2. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Key Topics What is a Company? A company incorporated in the Islands - By virtue of the Companies Law - Foreign Company registered under the Companies Law Companies Law, 2004 Revision applies - Separate legal entity (separate from owners) - Memorandum of Association - Articles of Association - Procedures for Incorporation Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943

3. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Types of Companies Ordinary Resident - Carries on business within the Islands - May own property in the Cayman Islands - Holding Company - Apply for a Trade & Business License

4. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Types of Companies Ordinary Non-Resident - Approved as such by the Financial Secretary, who provides a Certificate designating such - Not a company which does, or intends to, carry on business within the Islands Exempt - Also cannot carry on business within the Islands - Can benefit, if applies, for exemption from taxes for a period of 20 years, which can be extended to 30 years

5. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Advantages of Incorporating a Company Limited Liability Asset Protection Confidentiality – (owning land) Tax Exemption of Exempt Company Solomon v Salomon

6. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics General Due Diligence Requirements Due Diligence Requirements vary among Service Providers, but generally require: - For all persons / companies involved (Directors, Controlling (>10%) Shareholders, Controlling (>10%) Beneficial Owners, and sometimes Officers - Identification - Residential Address confirmation - Financial Reference (>3 years) - Professional Reference

7. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Process of Applying for a T&B License Form Company or apply in personal name if Caymanian Complete forms and Cover letter to the Trade & Business Licensing Board explaining the purpose of the Company Complete Due Diligence Pay relevant fee Process takes about 6 weeks Annual Renewal

8. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Caymanian Participation Regardless of what exists on paper, if the company is not genuinely Caymanian controlled, it is considered to be “Fronting” - 60% of the voting rights must be exercised by a Caymanian - 60% of the Board of Directors must be Caymanian

9. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Process of Applying for a Local Companies (Control) Law Grant This is where a Company has obtained a special license under the Local companies (Control) Law (Revised) (“LCCL”) Must incorporate a Company Granted at the Board’s Discretion Must advertise for at least two weeks to seek Caymanian Participation Same procedures as for the Trade & Business license

10. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Shareholders Agreements Required when a company owns a business and has more than two shareholders Sets out the object of the Company Conduct of Companies Affairs Classes of Shares and Dividend policies

11. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Work Permit Requirements for Non-Caymanians Any non-Caymanian employed by a local Company or Business must apply to the Work Permit Board for a work permit for the Non-Caymanian The Company or Business must have a Trade & Business License or LCCL

12. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Labour Law Every employee within 10 days of employment must have a Statement of Working Conditions which shall state the following:- Job title / Responsibilities Hours of work Salary / pay period Period of Employment / Probationary Period Holiday / Sick Leave / Other benefits Notice required to terminate contract

13. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Related Fees Legal Fees Registered Office Fees Government Fees for Company Trade & Business Licensing Fees LCCL Fees Work Permit Fees

14. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Legal Structure Sole Proprietorship - Flexibility, profits vs. unlimited liability, lack of continuity Partnership - More experience vs. tied to partners Corporation - Limited liability, unlimited life, transfer of ownership vs. more regulated, costly to organize

15. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Licensing Requirements All businesses and professionals operating in the Cayman Islands must be licensed under the law relevant to their industry. Regulators: - Trade and Business Licensing Board - Cayman Islands Monetary Authority - Hotel Licensing Board - Information and Communications Technology Authority

16. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Employment Regulations Working Conditions - Department of Employment Relations Health Insurance - Health Insurance Commission Pensions - National Pensions Office Work Permits - Immigration Department - Work Permit Board & - Business Staffing Plan Board

17. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Protecting Your Business Ideas You should freely circulate your executive summary or PowerPoint slides Perform your own due diligence on investors Limit disclosure of sensitive information Use a non-disclosure / non-circumvent agreement Registering intellectual property

18. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Protecting Your Business Ideas Trade Secrets are recipes, designs, processes, etc. that are kept secret to protect them from public knowledge A patent for an invention is the grant of a property right to the inventor to exclude others from making, using, offering for sale, selling or importing the invention

19. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Key Topics Protecting Your Business Ideas A trademark is a word, name, symbol, or device that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others Copyright is a form of protection provided to the authors of “original works of authorship” including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished.

20. LAWS AND REGULATIONS FOR BUSINESSES IN CAYMAN Addressing Start-Up Ventures Presented by Sherri A. Bodden, MBE, LIB (Hons.) www.dci.gov.ky | t: +1.345.945.0943 Closing Further Information Sherri A. Bodden Attorney at Law and Partner of the Firm Bodden & Bodden Contact information: 943-0202 sbodden@bcsl.ky