The Cayman Island economic substance law applies to ‘relevant entities’ that conduct a ‘relevant activity’. A Cayman Exempted Company is a relevant entity and a pure equity holding company is one of the relevant activities.

Holding Companies are subject to lower economic substance requirements. If your company will be a pure equity holding company, the economic substance requirement is satisfied if it has complied with all filing requirements and has a registered office in the Cayman Islands. Clara will act as the corporate service provider in Cayman, providing you with a register office and complete your annual filings. Therefore, the economic substance requirement is easily met for most start-ups.

A pure equity holding company means a company that only holds equity participations in other entities and only earns dividends and capital gains.