Cayman Islands Introduces Beneficial Ownership Regime Register
Published: 16 May 2017
In April 2017 the Cayman Islands Legislative Assembly passed a series of law amendments, in order to introduce a new regime governing the collection, maintenance and sharing of information regarding the ultimate beneficial ownership or control of companies (companies) and limited liability companies (LLCs) registered under the Companies Law 2016 (the Regime). These requirements will come into force on 1 July 2017.
The Regime requires all companies incorporated or registered by way of continuation under the Companies Law (as amended), including ordinary resident and non-resident companies, special economic zone companies or LLC that does not fall into the legislation’s exemption (each an In-Scope Entity) to identify its beneficial owners and maintain a beneficial ownership register (Register) at its registered office in the Cayman Islands with a licensed and regulated corporate service provider. Each entity that falls into the Regime will be required to give notice in writing to all beneficial owners and relevant legal entities. The recipients will then have a month from the date of receipt of notice to state whether they are a registrable person, and if they are a registrable person to provide correct information on the details required.
Who is exempt?
The following types of entities are exempt from the primary obligations of the Regime and are not required to create or maintain a Register:
- Legal entities registered under the Mutual Funds Law as well as legal entities, registered or licensed to the Banks and Trust Companies Law, the Building Society Law, the Companies Management Law, the Cooperative Society Law, the Money Services Law and the Securities Investment Business Law;
- Legal entities listed on the Cayman Islands Stock Exchange or another approved stock exchange.
- Legal entities managed, arranged, administered, operated or promoted by an “approved person” as a special purpose vehicle, private equity fund, collective investment scheme or investment fund;
- Legal entities which act as a general partner of a private equity fund, collective investment scheme or investment fund that is managed, arranged, administered, operated or promoted by an “approved person”;
- Legal entities which are substantially owned/controlled subsidiaries of one or more exempt entities; and
- Legal entities which are otherwise exempt by regulation.
Who is a beneficial owner?
Where the In-Scope Entity is a company individual (A) will be a beneficial owner of company (company B) if A meets one or more of the following conditions in relation the company B:
- A holds, directly or indirectly, more than 25% of the shares in company B;
- A holds, directly or indirectly, more than 25% of the voting rights in company B; or
- A holds the right, direct or indirectly, to appoint or remove a majority of the board of directors or LLC managers of company B.
If no individual meets the above conditions then individual A will be a beneficial owner of company B if A has absolute and unconditional legal right to exercise, or actually exercises significant influence or control over company B.
The Register should record the details of individuals who own or control more than 25% of the equity interests, voting rights, or rights to appoint or remove a majority of company directors, or LLC mangers. The individual should disclose:
- Full legal name.
- Residential address and, if different, an address for service of notices under this Law.
- Date of birth.
- Information identifying the individual from their passport, driver’s license or other government issued documents, including - identifying number, country of issue and date of issue and of expiry.
The date the individual became or ceased to be a registrable person in relation to the company in question.
- The company should disclose:
- Corporate or firm name;
- Registered or principle office;
- The legal form of the entity and the law by which it is governed;
- If applicable the register in which it is entered and the registration number on that register;
- Date of which they became or ceased to be registrable.
The regulated corporate service provider must provide access to information extracted from the Regime through a centralised IT platform. The platform will be operated by the assigned competent authority. The information held of this platform will not be held on a centralised register by either the Cayman Islands Government or the competent authority, nor will it be publicly searchable or accessible. Only the Cayman Islands and UK authorities will have the rights to request information on an individual request basis only.
If you have any questions in relation to this please contact Jennifer Wood.