Guidance Notes On Complying With Beneficial Ownership Obligations In The Cayman Islands

• Published date: 02 August 2022
• Subject Matter: Corporate/Commercial Law, Tax, Corporate and Company Law, Tax Authorities
• Law Firm: Appleby
• Author: Sheila Crosby, Menelik Miller and Miriam Smyth

An overview of the Cayman Islands Beneficial Ownership Guidance Notes.

INTRODUCTION

The Cayman Islands Competent Authority for Beneficial Ownership (the Competent Authority) published Guidance Notes on Complying with Beneficial Ownership Obligations in the Cayman Islands on 26 July 2022¹ (the Guidance Notes). The Guidance Notes provide guidelines that should be adopted by companies, LLCs and LLPs that are in scope for the provision of beneficial ownership information under the Cayman Islands Beneficial Ownership legislative framework² (the BO Regime).

Objective of the BO Regime. The objective of the BO Regime is to preserve transparency and strengthen the cooperation and information sharing between international law enforcement agencies and competent authorities in line with international standards in order to combat money laundering, tax evasion and terrorist financing and ensure the Cayman Islands maintains its position as a premier financial center.

Overview of the BO Regime. Unless an exemption applies, all ordinary resident companies, ordinary non-resident companies, exempted companies, LLCs and LLPs incorporated or registered in the Cayman Islands (In-Scope Entities)³ are required establish and maintain a beneficial ownership register (BOR) with either their corporate service provider (CSP) or directly with the Registrar of Companies (ROC). In-Scope Entities that qualify for an exemption⁴ from the requirement to establish and maintain a BOR must file evidence of their exemption (Written Confirmation of Exemption).

The required particulars on beneficial owners and relevant legal entities (Beneficial Owners) set out in the BOR may be shared with international regulatory, enforcement and tax authorities in accordance with legislation, agreements, treaties and memoranda of understanding agreed between the Cayman Islands and other jurisdictions.

THE MULTI-PRONGED APPROACH

The BO Regime is based on a multi-pronged approach whereby different parties must perform specific roles, as highlighted in the Guidance Notes:

• In-Scope Entity: must (i) take necessary measures to identify Beneficial Owners, (ii) hold up-to-date and accurate information on Beneficial Owners, (iii) identify relevant changes in beneficial ownership information, and (iv) provide all beneficial ownership information to its CSP (or ROC);
• CSP: must (i) assist with establishing the BOR, (ii) obtain and hold current beneficial ownership information, (iii) verify the information is correct, (iv)...