To operate a cryptocurrency business in the Caymans, a legal entity must be registered or licensed with CIMA. To do so, it completes the relevant application form with all the information required by law. The regulator may request additional information from applicants to ascertain the suitability of applicants.

Please note that in order to carry out activities related to the provision of a virtual asset custody service or the management of a trading platform for virtual assets, a legal entity must apply for a license.

Applications for registration/licensing are submitted to the Management Committee, which usually meets weekly. Once the applicant has met all requirements, a notification letter will be sent to the applicant within 2-3 working days.

CIMA evaluates applications for, inter alia, compliance and integrity of shareholders, proposed directors, senior officers, business plan, transparency, risk management, internal controls, cybersecurity measures including IT or blockchain infrastructure, and AML/CFT/PF systems and sanctions monitoring.

Below we outline the basic requirements for registration with CIMA:

• Completed REEFS application form
• List of applicant's blockchain addresses (per coin)
• Chief Information Officer/Chief Information Security Officer information, including their CVs
• Copies of cybersecurity policies
• Copies of AML/CFT policies
• A detailed business plan, which must include such information (not limited to):
• a detailed description of the business being conducted or to be conducted
• details of the products and services and details of the process for providing those services
• the reasons why you wish to establish a business on or within the Islands
• background information: company history, management team, number of proposed employees, corporate structure, names and percentage of all shareholders, etc.
• two years of financial statements and financial projections
• physical location of operations
• customer base
• service delivery channels and marketing plan/strategy
• corporate governance, e.g. composition of the board of directors
• information on contracts with affiliates and outsourcing arrangements, if applicable, and details of whether these are regulated in any jurisdiction
• an explanation of the risk management and internal control strategy within the business
• confirmation that the legal entity will comply with all relevant laws, rules, regulations and statutes
• Schemes of operations
• Details of outsourcing and related agreements

The information to be provided when applying for major shareholders (10% and above), directors and officers is as follows:

• Certified copies of educational and professional certificates
• Certificate of police clearance or proof of no criminal record
• A fully completed personal questionnaire form
• Two character references
• One financial reference
• Updated and complete CV
• Notarized or similarly certified color copy of a photo identification card
• Completed source of funds/source of wealth declaration form with supporting evidence for major shareholders

Before receiving a cryptolicense in the Cayman Islands, a crypto project must get ready to fulfill a number of requirements. Thus, they include (not limited to this list):

• registered office in the Caymans
• having proper senior officers, trustees, beneficial owners and appointing such persons only with the approval of the CIMA
• complying with AML legislation that deal with ML, TF and PF as well as the implementation of AML systems and procedures and the appointment of an officer responsible for procedures to combat ML, TF and PF
• when performing a transfer of virtual assets a person must collect and maintain information on the beneficiary and originator of the transfer in accordance with the AML law and any additional information for all transfers performed and comply with any other requirements outlined therein - the Travel Rule Return must be completed and submitted through the STRIX system to the Anti-Money Laundering Unit within 10 days of receipt from CIMA
• it is required to ensure the accuracy of communications relating to virtual asset services
• no shares totalling 10 % or more of the total shares in a company shall be issued, and no issued shares or interests shall be voluntarily transferred or disposed of, without the prior approval of the CIMA
• can't engage in securities investment business unless the person is registered or is a licensee under the Securities Investment Business Act (2020 Revision) (SIBA) or has been exempted from registration or licensing by the CIMA
• it must secure the personal data and virtual assets of clients
• there is an obligation to provide an audit report, prepared by an independent auditor, on AML systems and procedures for compliance with the AML regulations
• annual preparation of accounts and making them available for audit at CIMA's request at its registered office
• annual preparation of accounts and making them available for audit at CIMA's request at its registered office
• notification to the regulator of:

• any license or registration in another jurisdiction
• the opening of an office or the establishment of a physical presence in another jurisdiction
• any fines or enforcement action taken against the entity in the other jurisdiction
• the ownership or acquisition of a controlling interest in another person or legal entity engaged in servicing virtual assets

In addition, there are specific requirements for virtual asset trading platforms and custody services.

The Caymans do not levy any taxes and are often featured as a tax haven. Thus, the following taxes are not imposed here:

• corporate income tax
• personal income tax
• capital gains tax
• withholding tax on dividends or interest payments
• value added tax
• payroll tax
• property tax
• inheritance tax
• gift tax

Notwithstanding its reputation as an offshore haven, the Caymans are reasonably compliant with international tax standards. The jurisdiction has signed numerous Tax Information Exchange Agreements (TIEAs) with other countries.

There is currently no tax legislation on cryptocurrencies, making the islands one of the best places to avoid cryptocurrency taxes entirely.