On 11 April 2016, the Cayman Islands government formally
announced a commitment to enhance its existing robust arrangements
with the UK government on the exchange of beneficial ownership
information in relation to Cayman Islands companies. This
proposed enhancement was originally signalled in December 2015,
following several months of discussions between the UK and Cayman
Over the last 20 years, the Cayman Islands has established
itself as a leading domicile for international business, finance
and investment funds by consistently being in the vanguard of
jurisdictions that have cooperated and collaborated with the
international community. The Cayman Islands introduced
internationally compliant legislation reflecting advances and
evolution in anti-money laundering and know your customer laws many
The Cayman Islands has also been an early adopter of tax
information exchange arrangements, such as bi-lateral tax
information exchange agreements, US FATCA, UK style FATCA and the
OECD Common Reporting Standard, into which it has entered with some
95 countries. This approach has ensured that the Cayman
Islands continues to meet the high standards of due diligence
required by, and to have the confidence of, the international
institutional business and regulatory community.
UK law enforcement agencies already have a right to
request certain information under existing international agreements
with the Cayman Islands, so, in effect, the announcement of 11
April 2016 will primarily provide a more streamlined process.
We understand that the enhancement announced will be finalised
by June 2017 and the details of the operation of the new
centralised beneficial ownership platform are still to be
finalised. Whilst we do not yet know all of the details, we
anticipate that the Cayman Islands requirements may approximate
those recently adopted in the UK. The UK regime requires
companies to maintain a register of persons with beneficial
ownership or control which exceeds a certain threshold, and
includes a 25% ownership test. However the registers for
Cayman Islands companies will be privately maintained by licensed
service providers in the Cayman Islands and will not be public,
although that information will be accessible directly, subject to
certain safeguards, by the Cayman Islands authorities on proper
request made by UK law enforcement agencies.
The Cayman Islands government has announced that they will
consult further with the industry as they go through the normal
consultation process during the implementation process.
Therefore, there is no immediate action that clients need to
take, for now.
We will update you with more information over the coming year as
and when more details are released as to how the Cayman Islands
will implement these enhancements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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