Following public consultation during 2016 and early 2017,
legislation has been passed which will require Cayman Islands
companies (but not partnerships) to maintain registers of
beneficial ownership at their registered offices. The Cayman
Islands Ministry for Financial Services (or its designate), as the
Cayman Islands competent authority (the "Competent
Authority"), will establish a non-public platform
which will allow it to search information on a company's
beneficial ownership provided by the company's corporate
services provider upon the request of specified Cayman Islands or
UK law enforcement authorities.
What do companies need to do?
Unless falling within one of the exemptions discussed below, a
company must take "reasonable steps" to identify
individual "beneficial owners" or "relevant legal
entities". For these purposes, a company must give notice to
anyone it knows or has reasonable cause to believe is a
"beneficial owner" or "relevant legal entity"
in relation to it and may also give notice to a person it believes
knows the identity of such a person. The notice shall require the
persons to whom it is addressed to confirm within one month whether
or not they are registrable persons. For the purposes of
identifying "beneficial owners" and "relevant legal
entities", a company is entitled to rely on the response of a
person to such a notice, unless the company has reason to believe
that the response is misleading or false. There is no requirement
to disclose information protected by legal professional privilege
or where disclosure is prohibited by law.
An individual is a beneficial owner of a company if the
individual holds, directly or indirectly, more than 25% of the
shares or voting rights in the company or the right to appoint or
remove a majority of the board of directors of the company. If no
individual meets these conditions then the law looks to persons who
directly or indirectly exercise significant influence or control
over the company through direct or indirect ownership or interests,
unless such control is solely in the capacity of a director,
professional advisor or professional manager.
The company must provide the required particulars of beneficial
owners and certain relevant legal entities in respect of a company
to its corporate services provider with instructions to enter the
required particulars in the company's beneficial ownership
register (or, if none are identified, enter a nil return). In line
with practice, this information is most likely already held by
corporate services providers in the Cayman Islands pursuant to
anti-money laundering laws.
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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A company which failed to comply was at risk of fines and deemed dissolution.
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