Update on the Beneficial Ownership Regime - Q1 2018

The Cayman Islands has recently passed some amendments to the laws regarding the beneficial ownership regime (the “BO Regime”).

As you may already be aware, the BO Regime came into force on 1 July 2017 and, in broad terms, requires Cayman Islands companies and limited liability companies (together “Affected Entities”) to establish and maintain beneficial ownership registers. Affected Entities will not be required to establish such registers in circumstances where they can take advantage of an applicable exemption. For the avoidance of doubt, partnerships and foreign companies are not Affected Entities and do not need to comply with the BO Regime.

The amendments to the BO Regime came into force on 13 December 2017 and, among other things, made two key changes. Firstly, the amendments to the specific wording of the exemptions to the BO Regime (as discussed in our last quarterly newsletter) which, crucially, removed the exemption which previously applied to those entities who are registered with CIMA under the Securities Investment Business Act (2015 Revision) as an Excluded Person and those entities who are managed by them. Secondly, the amendments also clarify that an Affected Entity which is able to take advantage of an exemption to the BO Regime is required to provide a form of notice to the registered office services provider confirming the reasons why it is out of scope. The registered office services provider is then required to notify the Competent Authority of such out of scope status accordingly.

To the extent Affected Entities which we provide registered office services to have not already provided us with such confirmation, we will be making contact with them to obtain a declaration of the reasons for their out of scope status. This information will then be provided to the competent authority in the Cayman Islands once the mechanics for submission have been determined and made available. The BO Regime will start being enforced with effect from 1 July 2018 and so we encourage all Affected Entities to seek compliance before that date.

Read the Beneficial Ownership Legal Update.