Delaware or Cayman Islands: where should you start a business?
The Cayman Islands ranks higher in the index, 08 against 18. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
No Delaware income tax is due where no business is done in the state, but annual franchise tax applies. There is no state sales tax.
Companies pay no corporate income, capital gains or withholding tax, and no VAT is charged. Individuals pay no income or inheritance tax.
Set-up
A corporation's filing fee starts at US$109. No standard processing time is published, but paid services offer 24-hour, same-day and faster filing.
Registration costs CI$700 to CI$2,568 by capital band. An express service completes within 24 hours for CI$500 more, and no minimum capital applies.
On the ground
Every company must keep a registered agent with a Delaware address, and no director needs to live in the state. There is no minimum capital.
Directors need not live in the islands, but the company must keep a registered office there. Economic substance requirements depend on the activity.
Ownership
Under FinCEN's final rule, effective 14 August 2026, companies formed in the United States are exempt. Only foreign companies registered there still report.
Since 28 February 2025 the beneficial ownership register is open only to persons with a legitimate interest, including journalists, at CI$75 an application.
Residence
Owning a company confers no residence. The E-2 visa is limited to treaty nationals, and the EB-5 requires an investment from US$800,000.
The Certificate of Direct Investment requires at least CI$1,000,000 invested in a licensed business that generates employment.
Living and working
Currency
US dollar.
Cayman Islands dollar.
Time zone
UTC-5, and UTC-4 in summer.
UTC-5.
Personal tax
Federal top rate 37% above $640,600 for a single filer in 2026; Delaware charges 6.60% from $60,000 and repealed estate tax in 2018.
There is no income, inheritance, capital gains, gift or property tax, but most real estate sales carry 7.5% stamp duty.
Flights
Wilmington (ILG) has Avelo flights to Florida and San Juan, and an American Airlines coach to Philadelphia, which serves Heathrow.
Services include British Airways to London via Nassau and Delta and JetBlue to New York; there is no Dubai or Singapore service.
Language
English is the official language of the United States under an Executive Order of 1 March 2025.
Delaware vs Cayman Islands: common questions
Delaware: No Delaware income tax is due where no business is done in the state, but annual franchise tax applies. There is no state sales tax. The Cayman Islands: Companies pay no corporate income, capital gains or withholding tax, and no VAT is charged. Individuals pay no income or inheritance tax.
Delaware: A corporation's filing fee starts at US$109. No standard processing time is published, but paid services offer 24-hour, same-day and faster filing. The Cayman Islands: Registration costs CI$700 to CI$2,568 by capital band. An express service completes within 24 hours for CI$500 more, and no minimum capital applies.
Delaware: Every company must keep a registered agent with a Delaware address, and no director needs to live in the state. There is no minimum capital. The Cayman Islands: Directors need not live in the islands, but the company must keep a registered office there. Economic substance requirements depend on the activity.
Delaware: Under FinCEN's final rule, effective 14 August 2026, companies formed in the United States are exempt. Only foreign companies registered there still report. The Cayman Islands: Since 28 February 2025 the beneficial ownership register is open only to persons with a legitimate interest, including journalists, at CI$75 an application.
Delaware: Owning a company confers no residence. The E-2 visa is limited to treaty nationals, and the EB-5 requires an investment from US$800,000. The Cayman Islands: The Certificate of Direct Investment requires at least CI$1,000,000 invested in a licensed business that generates employment.
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