A lot of charitable organisations in the Cayman Islands stand to be heavily penalised by 1 August 2018, due to noncompliance with The Non-Profit Organisations Law. Persons will be able to see the entities who have complied with the law in a newspaper ad scheduled for Friday, 1 June.

As of 16 April, there were 63 registered NPOs in the Cayman Islands. According to General Registry, the registrar for Non-Profit Organisations (NPOs), there are at least 300 NPOs, such as sports associations, churches, community organisations, and service clubs, currently in local operation.

'Since last July, Registry and the Ministry of Financial Services have hosted numerous workshops, appeared on multiple radio shows, and sent multiple direct mails to a contact list of more than 300 potential NPOs', said Registry's Head of Compliance Paul Inniss.

'We strongly encourage persons to submit their applications for the NPO register by 15 June, so that Registry has time to process them before the legal registration deadline of 31 July 2018. With so many applications outstanding, we want to make sure that there's no backlog', he said.

Applications can be completed and filed via the Cayman Business Portal (CBP), General Registry's 24/7 online tool for local businesses.

NPOs that have not yet registered can learn about their legal requirements and receive face-to-face assistance with completing their registrations. General Registry will be hosting two-hour registration workshops every Tuesday and Thursday, from 5pm to 7pm, at its offices on the ground floor of the Government Administration Building. The workshops, which will be on an appointment basis, begin on Tuesday, 8 May, and are expected to last until Thursday, 28 June.

Organisations that meet the legal definition of an NPO and register before the deadline will have their $300 application fee waived. Registration applications should be filed with General Registry by 15 June to allow for sufficient processing time.

'For affected entities, registration is mandatory. Failure to register will result in a number of penalties', Mr Inniss said.

Mr Inniss reminded NPOs that missing the 31 July legal deadline will mean companies currently registered under section 80 of The Companies Law, who meet the NPO definition, will be struck off the Companies Register. The assets of companies that are struck from the register would be vested in the Crown, as per The Companies Law.

There are also penalties for charities if they do not register and continue to operate as an NPO after the 31 July registration deadline.

These charities will face a $500 penalty fee for noncompliance, plus $10 for every day beyond 1 August 2018 that they fail to apply for registration, up to a maximum fine of $3,000. They would also face the refusal of Government funding in cases where it was previously given. Additional criminal sanctions may apply to entities continuing to operate past the deadline without registering.

'The law will not only protect local residents from any potential bad actors but further align Cayman with global regulatory standards, which recognise that serious financial crimes, such as terrorist financing, can occur through NPOs', Mr Inniss said.

For more information on NPOs, email Mr Inniss at paul.inniss@gov.ky.

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