Terminating your Cayman company to avoid 2025 annual fees

If you have a Cayman company which has no assets or liabilities and would like to terminate this entity to avoid 2025 annual fees, please contact our specialist full-service liquidations team in Dubai who can prepare the required documentation to commence the termination and conduct the required statutory filings to ensure the upcoming filing deadlines are met. 

There are two ways you can terminate your solvent Cayman company:

1. Voluntary liquidation: this is an out of court process that Cayman companies which are solvent, and have ceased trading, can use to terminate. There are a number of steps which need to be taken to commence the voluntary liquidation, arrange the required statutory notices / advertisements to notify potential creditors of the commencement of the liquidation and hold the final meeting of the company to approve the liquidation. Once the final meeting has taken place and the final return has been filed, the company will be dissolved in three months and cease to exist. Importantly, the valid completion of a voluntary liquidation and dissolution is a terminal event, meaning it cannot be restored and the directors of the company can take comfort that no action can be taken against the subject company or any of the directors following its dissolution. For a straightforward voluntary liquidation of a Cayman company, the statutory process can take about 6 to 7 weeks to complete

2. Strike off: this is also an out of court process where an application can be made to the Registrar of Companies to strike your company from the register of companies. However, this process is only recommended for companies that have never been active, since struck off entities can be restored within 10 years of being struck off by aggrieved parties and striking off does not affect the liabilities of the company or directors.

Compliance with regulatory obligations before termination: companies must ensure they have fulfilled all regulatory and reporting obligations prior to proceeding with termination. Clients will need to consider whether their companies are subject to economic substance filings and, if so, ensure that appropriate arrangements have been made to organise such filings and the payment of any related third-party fees and disbursements prior to the commencement of the liquidation. If the companies are registered as a regulated fund with the Cayman Islands Monetary Authority ("CIMA"), they will need to deregister with CIMA before proceeding. Our Funds and Regulatory teams in Dubai can assist with compliance with regulatory obligations prior to termination. 

Walkers can act as voluntary liquidator: a company must appoint a voluntary liquidator to oversee its liquidation even in circumstances where company holds no assets or liabilities. The role of the voluntary liquidator is to manage the process of winding down the company and to ensure that all relevant statutory requirements are met. Walkers provides a complete liquidation service which includes the option to engage and appoint Walkers Liquidations Limited (''WLL'') to serve as voluntary liquidator for Cayman companies that have no assets or liabilities. Appointing WLL as a third-party liquidator facilitates a smooth and efficient liquidation process. This minimizes risks for directors, as responsibility for the company’s dissolution is transferred to the appointed liquidator, simplifying the process.

Deadlines to avoid 2025 annual fees:

To avoid incurring annual government fees for 2025, the appointed liquidator will need to hold the final meeting of the company and file the company's' final return on or before 31 January 2025. To achieve this, we would recommend that clients work towards the following key dates:

1. Instruct Walkers to commence the liquidation process by Friday 15 November 2024.

2. Should you require the services WLL, the due diligence questionnaire required to appoint WLL should be completed and returned to Walkers by Wednesday 20 November 2024. If you do not require the services of WLL the company may appoint an alternative individual to act as the voluntary liquidator (for example a director of the company) and this questionnaire will not be required.

3. Finally, the initial documents to commence the liquidation of a company should be signed and returned to by Walkers by Friday 29 November 2024.

If you require assistance in connection with the termination of entities incorporated in Cayman, BVI, ADGM, and DIFC, or any other Cayman Islands or BVI legal issues, please contact any of the contacts from the Insolvency and Dispute Resolution team listed below.