CAYMAN ISLANDS Law and Practice Contributed by: Norman Klein and Adam Johnson, Appleby
Debentures and legal or equitable mortgages, or charges of immovable or movable property within the Cayman Islands: • in the case of a debenture or a legal or equi - table mortgage, or a charge of immovable property within the Cayman Islands: (a) 1% of the sum secured where the sum secured does not exceed KYD300,000; or (b) 1.5% of the sum secured where the sum secured is more than KYD300,000 (whether initially or after a further ad - vance); • in the case of a legal or equitable mortgage, or a charge of movable property within the Cayman Islands, 1.5% of the sum secured (subject to a maximum charge of KYD500 where the security instrument is granted by a Cayman Islands exempted company, a Cayman Islands ordinary non-resident company, a Cayman Islands exempted trust or a body corporate incorporated outside of the Cayman Islands, or where the security is over shares in a Cayman Islands exempted company or a Cayman Islands ordinary non- resident company); and • usually paid by the borrower. Policies of insurance for property within the Cay - man Islands: • 2% of the cost of new or renewed property insurance premiums; and • usually added to insurance premiums. Subject to limited exceptions, ad valorem share transfer tax is payable on the transfer or issue of equity capital in a land-holding corporation, at the rate of 7.5% of the proportionate value of the entire land holding. A land-holding corpora - tion includes a partnership, foreign corporation, chartered corporation, mutual fund or incorpo -
rated company (but not a corporation sole or charitable corporation) that holds any legal or beneficial interest (excluding interests created pursuant to bona fide security instruments) in landed property in the Cayman Islands (or inter - est in another land-holding corporation). Landed property includes freehold interests in Cayman Islands real property and any leasehold interest where the original term exceeded 30 years. Most other instruments and documents are sub - ject to a fixed rate of stamp duty in compara - tively nominal amounts. Registrable instruments are also subject to relatively immaterial registra - tion fees. Subject to limited exceptions, real estate used for paid tourist accommodation attracts tax at 13% of the amount charged to each tourist. No other domestic taxes or municipal rates are currently payable on the occupation, acquisition, ownership or disposal of Cayman Islands real property or income deriving therefrom. 2.11 Legal Restrictions on Foreign Investors There are generally no restrictions on foreign ownership of real estate in the Cayman Islands, although certain formalities may apply to differ - ent types of purchaser. The carrying on of business from real estate within the Cayman Islands requires certain local licences, some of which are specific to property type.
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