Insights

Amendments to the Trusts Law (2018 Revision) (Trusts Law) affirm the reputation of the Cayman Islands as a leading trusts jurisdiction.

In this article, originally published by Private Banker International, Matthew Howson shows how advisors can manage the succession of a BVI Co.

Given the global harmonisation of the various financial markets and the increase in cross-border operations and activities of managers of alternative investment funds (AIFs), the BVI’s Financial Services Commission and the UK’s Financial Conduct Authority have signed a memorandum of understanding (MoU) relating to mutual legal assistance in the supervision of managers of AIFs, their delegates and depositaries that operate on a cross-border basis in the BVI and the UK. The MoU is generally structured similarly to an information exchange agreement. The MoU comes into force on the date the European Union legislation cease to have direct effect in the UK.

In Palladyne International Asset Management B.V. v Upper Brook (A) Ltd and Others, the Grand Court of the Cayman Islands issued important judicial guidance regarding the extent to which the dealing restriction under the Libyan sanctions regime was applicable in the Cayman Islands. In particular, the court was asked to examine the scope and meaning of the restriction on the ‘use’ of funds frozen under the Libya (Restrictive Measures) (Overseas Territories) Order 2011.

The BVI ITA announced yesterday that the FATCA and CRS reporting deadline for all reporting Financial Institutions (FIs) other than Trustee Documented Trusts (TDT) remains 31 May 2019. TDTs with CRS reportable accounts have until 28 June 2019 to complete their CRS reporting for the 2018 calendar year.

The International Tax Co-operation (Economic Substance) Law (the ES Law) was introduced in the Cayman Islands on 1 January 2019 in response to OECD’s Base Erosion and Profit Shifting framework and related EU initiatives in relation to what are known as ‘Geographically Mobile Activities’. Under the ES Law any relevant entity which carries on a relevant activity and receives relevant income in a financial period must satisfy the economic substance test in relation to that activity (ES Test) and make an annual filing with the TIA. Aside from the basic filing requirements, a relevant entity which does not carry on any relevant activity is not required to satisfy the ES Test. Harneys has issued a guide to assist directors and operators of Cayman Islands companies and limited liability partnerships.