Cayman Islands Beneficial Ownership regime commences

New legislation establishing a beneficial ownership regime in the Cayman Islands commenced on 1 July 2017. The new legislation requires certain companies incorporated or registered in the Cayman Islands to maintain a register of information about their beneficial owners to be held at its registered office in the Cayman Islands maintained by a licensed corporate services provider.

This register will be submitted to a secure non-public centralized platform maintained by the Registrar of Companies of the Cayman Islands.
It is expected that there will be a short grace period to allow those affected some time to comply with the new legislation. Here’s what you need to know and how Intertrust can help.

How does this apply to my entities in the Cayman Islands?

The new requirements will apply to companies incorporated (or registered by way of continuation) under the Companies Law (2016 Revision) and to limited liability companies formed and registered (or registered by way of continuation) under the Limited Liability Companies Law, 2016. This will include ordinary resident and non-resident companies, special economic zone companies, exempted companies (including limited duration and segregated portfolio companies) and limited liability companies.

There are a number of exemptions where certain categories of companies or limited liability companies will not need to maintain a register. Generally, an exemption will apply if the company or limited liability company is itself, or is a subsidiary of another legal entity which is:

a. listed on the Cayman Islands Stock Exchange or another approved stock exchange (eg. NYSE, NASDAQ, London or Hong Kong Stock Exchanges);
b. registered or licensed under one of the Cayman Islands regulatory laws such as the Mutual Funds Law (2015 Revision) or the Securities Investment Business Law (2011 Revision); or
c. managed, arranged, administered, operated or promoted by an “approved person” as a special purpose vehicle, private equity fund, collective investment scheme or investment fund; or
d. a general partner of any vehicle, fund or scheme referred to in paragraph (c) above that is managed, arranged, administered, operated or promoted by an “approved person”.

The application of the new legislation is therefore limited in scope. It will not, for example, apply to hedge funds registered or licensed with the Cayman Islands Monetary Authority, other hedge funds or private equity funds managed or administered by an “approved person” or to companies or limited liability companies registered as “excluded persons” under the Securities Investments Business Law (2011 Revision).

Further, the new requirements do not apply to a trust or exempted limited partnership established under Cayman Islands law or to a foreign company or foreign limited liability company that is registered as a “foreign company” under Part IX of the Companies Law (2016 Revision).

What are the next steps and further actions required?

All Cayman Islands companies and limited liability companies will need to take steps to determine whether they fall within the scope of the new regime.

We can assist clients with the creation and maintenance of the register, the reporting of beneficial ownership information, the preparation of appropriate notices and forms, the preparation of board resolutions documenting compliance and such other matters required in order to comply with the obligations prescribed by the new legislation.

If you would like our assistance with any of the above, are interested in receiving further advice on your obligations under the new regime or have any questions, please get in touch with your usual Intertrust Cayman representative, one of our specialists below or email us at cayman@intertrustgroup.com.

For further information
Daniel Rewalt
Business Unit Director
Capital Markets, Intertrust Cayman
+1 345 914 3281
+1 345 526 3281
Deanna Derrick
Business Unit Director
Hedge Funds, Intertrust Cayman
+1 345 914 3211
+1 345 926 1375
Christopher Smith
Business Unit Director
Private Equity & Corporate, Intertrust Cayman
+1 345 914 3141
+1 345 525 3141
Michelle Gibbs
Director, Intertrust Cayman
+1 345 815 1476
+1 345 525 6447
Ryan Schroeder
Business Unit Director
Private Equity & Corporate US, Intertrust Cayman
+1 345 914 3282
+1 345 526 3282

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