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Cayman Islands Exempted Limited Partnership Registration Fees

A Cayman Islands exempted limited partnership (an "ELP") is limited liability partnership registered in accordance with the Cayman Islands Exempted Limited Partnership Law 2014.

Under Cayman Islands law, for an ELP to exist there must be a business carried on by two or more persons in common with a view to profit. An ELP is subject to certain further requirements in addition to these pre-requisites of partnership.

At its inception, an ELP requires at least one general partner (a "GP") which satisfies one of the criteria listed in 'Residency requirements' below and at least one limited partner (an "LP").

The terms of an ELP are invariably set out in an exempted limited partnership agreement (the "LPA"). In addition there are certain registration requirements which must be met.

1.       Legal Form

An ELP is not an entity with separate legal personality, and cannot own property in its own right. The general statutory position is that the property of the ELP will be held on statutory trusts by the GP or GPs jointly under section 16(1) of the ELP Law.

Any debt or obligation incurred by a GP in the conduct of the business of an ELP shall be a debt or obligation of the ELP.

All letters, contracts, deeds, instruments or documents must be entered into by the GP on behalf of the ELP.

2.       Nature of Business Permitted

An ELP may be formed for any lawful purpose or purposes to be carried out and undertaken either in or from within the Cayman Islands or elsewhere in accordance with the ELP Law, provided that the ELP shall not undertake business with the public in the Cayman Islands other than so far as may be necessary for the carrying on of the business of that ELP exterior to the Cayman Islands.

Certain activities are regulated in the Cayman Islands and an ELP may be required to obtain a licence or to register with the Cayman Islands Monetary Authority if it wishes to carry on such activities. These include banking business, trust business, company management, insurance business, mutual fund administration, business of a mutual fund and securities investment business.

3.       Main Features of an Exempted Limited Partnership

A Cayman Exempted Limited Partnership has the following characteristics:

(1)     General Partner (“GP”)

-      An ELP shall have at least 1 GP who is required to be either an individual resident in the Cayman Islands, a company incorporated or registered as a foreign company in the Cayman Islands.

-      A GP shall act at all times in good faith in the interests of the ELP.

-      In the event that assets of the ELP are inadequate, GP shall be liable for all debts and obligations of ELP.

(2)     Limited Partner (“LP”)

-      An ELP shall have at least 1 LP who can be either a natural person or a legal person.

-      A LP shall not take part in the conduct of the business of the ELP.

(3)     Registered Office (“RO”)

An ELP must have a RO in the Cayman Islands.

(4)     Change on Statement

-      If any change is made or occurs in any matter specific in the statement filed under Section 9 of the Law, the GP must within 60 days of such change file with Registrar a statement specifying the nature of the change.

-      Cessation of GP should be filed with the Registrar within 15 days of such arrangement or transaction.

(5)     Return of Capital Contribution or Distributions

-      Return of capital contribution or distribution to a LP may be made at the time of and immediately following such payment the ELP is solvent.

-      In the event of the insolvency of the ELP within six month period, after a return of contribution or part thereof received by the LP, such return is repayable by that LP with simple interest at the rate prescribed under the Law to the extent that such contribution or part thereof is necessary to discharge a debt or obligation of the ELP incurred during the period the contribution represented an asset of the ELP.

(6)     Annual Renewal Fee and Annual Reports (“AR”)

A GP shall file an AR with the Registrar in January of each year after the year of registration. Kaizen can assist client to prepare the AR and submit it together with the payment of annual government fee to the Registrar.

3.       Registration and Maintenance Fees

To establish an exempted limited partnership in the Cayman Islands, an entity will be required to act as the general partner.  In most of the cases, this will be a Cayman Islands exempted company.

(1)     Incorporation of Cayman Islands Exempted Company

(a)     Incorporation Fees

Our registration fee for a company with a share capital less than USD50, 000 is USD3,600. The fee covers first year license fee, first year registered agent fee and first year charge for the provision of registered office. If there is a Chinese name in addition to the English name there is an additional charge of USD400.

The registration fee covers initial set up and first year maintenance costs. Practically, it represents all the costs incurred in the first year.

Note:

(i)      A extra fee of USD400 is applicable if Chinese name is also registered;

(ii)     Certificate of Incumbency (or CPA Certification) as required by the bank: USD500

(iii)    The fees stated above does not include delivery fee, if any.

(b)     Annual Maintenance Fee

Annual maintenance fee for second year and thereafter is USD2,600 which covers annual license fee, annual registered agent fee and annual registered office fee.

(c)     Timescale

Upon submission, it normally takes around 7 to 10 working days to receive the Certificate of Incorporation (“CI”) and M&A from the Registry for English name incorporation and additional 7 to 10 working days if the company has a Chinese name.

For company incorporated with English name only, you may consider to process with Express Service, of which the CI and M&A will be available from the Registry in 2 to 3 working days after submission. If Express service is required, additional fee of USD800 will be charged in addition to the incorporation fees. Please note that no Express Service can be applied if the company will have Chinese name.

(2)     Set up a Cayman Exempted Limited Partnership

 (a)    Registration Fees

To establish the limited partnership using a standard form and a nominal consideration of USD1 paid by the general partner and any legal or natural person which can act as the initial limited partner we would need to prepare the followings with disbursement fees:-

In addition to the above disbursements, the following items would be payable for registering the exempted limited partnership in the Cayman Islands:

In this regards, the total fee of setting up the “Exempted Limited Partnership will be USD2,900+ USD3,220= USD6,120

(b)     Annual Maintenance Fee

Annual maintenance fee for second year and thereafter is USD3,800 which covers annual license fee and annual registered office fee.

Total: 3(1) + 3(2) = USD9,720

4.       Documents and Information required

(1)     Name of the proposed company

(2)     A  copy of passport, residential address proof issued within the past 3 months and bank or professional reference letter of each director and shareholder

(3)     Issued capital, percentage of shareholdings if more than one shareholder.

(4)     A brief description of the principal business activities of the Company.

For detailed due diligence checklist, please refer to the our Client Due Diligence Checklist for Cayman Islands Company Formation.

5.       Timescale

Incorporation time is in the order of three to four weeks. Express service is available at additional costs. With express service, the time taken for the issue of Certificate of Registration will be reduced from 5 to 7 working days to 2 working days.

6.       Important Note

Please note that the exempted partnership is initially registered with a standard partnership agreement. The partners can decide whether or not to amend the agreement incorporating the commercial terms applicable to the Cayman Islands limited partnership. If the agreement is being amended, an amended copy of the agreement should be delivered to us for record purpose.

If you decide to proceed with the incorporation, please fill in the attached ‘Offshore Incorporation Order Form’ and send it back to us via email.

Fees Schedule

Cayman Islands Exempted Limited Partnership

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:

Tel: +852 2341 1444

Mobile: +852 5616 4140, +86 152 1943 4614

WhatsApp/ Line/ Wechat: +852 5616 4140

Skype: kaizencpa

Email: info@kaizencpa.com