The Cayman Islands introduced the beneficial ownership regime in 2017. Following two years of implementation an internal review was conducted to assess the effectiveness and compliance of the regime. The review identified certain areas that require improvement and the Cayman Islands government has addressed these in the recently published Bill to amend the beneficial ownership regime.
To strengthen the effectiveness of the beneficial ownership regime the following changes are proposed in the Bill:
- all legal entities must maintain a beneficial ownership register, except those that are listed on the Cayman Islands Stock Exchange or are exempted in the regulations
- investment funds will not be required to file the register with the government, however the government can serve a notice on an investment fund requiring it to provide beneficial ownership information on demand
- corporate services providers (in addition to the legal entity) must take reasonable steps to identify beneficial owners for each of their managed legal entities
- corporate services providers must establish and maintain a beneficial ownership register for each of their managed legal entities
- corporate services providers, and any officer of the corporate services provider, in default of the requirement to establish and maintain a beneficial ownership register for a managed legal entity may be fined
- the government can search the beneficial ownership register of a legal entity for the purpose of verifying the accuracy of the information provided
- reporting threshold changed from “more than 25 per cent” to “25 per cent or more”
When will the Bill be passed?
We have no indication at this stage when the Bill will be passed, but we expect it to be before 31 December 2019.
When will the Bill come into force?
Once passed, we have no indication when it will come into force.
Will there be a transitional period?
At this stage there is no indication that there will be a transitional period.
Harneys Fiduciary provide registered office services to my entity, will they be in contact with me?
Yes. Due to the proposed obligations on the corporate services provider, Harneys Fiduciary will be contacting all legal entities for which it provides registered office services in order to ensure their beneficial ownership information is current.
What are the new fines for corporate services providers?
Corporate services providers, and any officer of the corporate services provider, in default of the requirement to establish and maintain a beneficial ownership register for a managed entity may be fined CI$500, per entity.
If the competent authority believes the default was knowingly and wilfully authorised or permitted then it may impose an additional penalty of CI$1,000 plus CI$100 per day the default continues.
For more information, please contact your usual Harneys contact.