With effect from 1 July 2017, the new legislation for Cayman companies and Limited Liability Companies to create and maintain a register of beneficial ownership (the “Register”) came into force.
The Register will be maintained at the Registered Office and will not be publicly accessible. Information within the Register will only be made available to a specified Cayman Islands competent authority, principally on proper and lawful request made by UK law enforcement agencies.
The introduction of this new legislation demonstrates the Cayman Islands’ continued commitment to meeting the high standards of due diligence and transparency demanded by the international financial services industry.
The following companies incorporated or registered by way of continuation under the Companies Law (2016 Revision) and the Limited Liability Companies Law (2016) are required to provide this information:
- Ordinary Resident
- Non-Resident Companies
- Special Economic Zone Companies
- Exempted Companies
- Exempted duration Limited Duration Companies
- Segregated Portfolio Companies
- Limited Liability Companies (LLCs)
Companies or LLCs (or their subsidiaries) exempted from keeping the Register are as follow:
- Listed on the Cayman Stock Exchange or another approved stock exchange
- Registered or holding a licence under a regulatory law as defined in section 2 of the Monetary Authority Law (2016 Revision), which includes regulated funds under the Mutual Funds Law and Excluded Persons under the SIB Law
- Managed, arranged, administered, operated or promoted by an ‘approved person’ as a special purpose vehicle, private equity fund, collective investment scheme or investment fund
- General partners of special purpose vehicles, private equity funds, collective investment schemes or investment funds, each of which is managed, arranged, administered, operated or promoted by an ‘approved person’
- Exempted by the Regulations
Details to be included on the Register comprise: name, residential address and (if different) address for service of notices, date of birth, information from relevant identification (passport, driving licence or other government-issued ID) and date on which the individual became eligible to be on the Register.
All beneficial owners eligible for the Register are required to provide their particulars to the company for entry into the Register, except where the Competent Authority is satisfied, having considered an undertaking provided by a beneficial owner, that there is legitimate reason for exemption.
For companies incorporated prior to 30 June 2017, the Cayman Islands government has stipulated a grace period of one year to provide the relevant information for the Register.
The Register must be updated to reflect any change in beneficial ownership within one month.
If a company fails to maintain the Register or keep it up-to-date due to the failure of a person eligible for the Register to provide the required information, the company must issue a restrictions notice to that person.
The penalty for beneficial owners and/or the company, which may include director, manager (LLC) or other officers, for failure to comply can be a severe fine and/or imprisonment.
Should you have any queries about the obligations JTC has in reporting beneficial owner information in relation to your structure, please do not hesitate to contact your JTC primary contact or, alternatively, Solvena ‘Sally’ Moore in our Cayman office.