Cayman Islands Beneficial Ownership Regime Update

Apr 2018

Since our Cayman Islands Beneficial Ownership Regime Alert in May 2017, the Cayman Islands Government has amended the beneficial ownership regime under the Companies (Amendment) (No. 2) Law, 2017 and the Limited Liability Companies (Amendment) (No.3) Law, 2017¹ and has issued further regulations under The Beneficial Ownership (Companies) (Amendment) Regulations, 2018² and The Beneficial Ownership (Limited Liability Companies) (Amendment) Regulations, 2018 (together the “Amending Laws”). The Amending Laws modify who must comply with the beneficial ownership regime and impose new filing obligations on out of scope companies. Consequently, all companies and limited liability companies (“companies”) registered in the Cayman Islands should review their obligations under the beneficial ownership regime and ensure that they are in compliance by the deadline of 30 June 2018.

What companies are out of scope and thus excluded from the requirement to keep a Beneficial Ownership Register?

Companies falling out of the scope of the beneficial ownership regime are not required to prepare and maintain a beneficial ownership register, but they are required to file prescribed details of the exemption applicable to them with the competent authority of the Cayman Islands.

The categories of entities falling out of scope of the beneficial ownership regime have been amended. The list now includes a legal entity or subsidiary of one or more legal entities, any of which is:

1. listed on the Cayman Islands Stock Exchange or an approved stock exchange;
2. registered or holding a licence under a regulatory law³ (other than a company registered as an excluded person under Section 5(4) of the Securities Investment Business Law (2015 Revision);
3. managed, arranged, administered, operated or promoted by an approved person as a special purpose vehicle, private equity fund, collective investment scheme or investment fund, including where the vehicle, fund or scheme is a Cayman Islands exempted limited partnership;
4. regulated in a jurisdiction deemed to have an equivalent Anti-Money Laundering framework to the Cayman Islands by the Anti-Money Laundering Steering Group⁴;
5. a general partner of a vehicle, fund or scheme referred to in paragraph (c) which vehicle, fund or scheme: (i) is registered or holds a licence under a regulatory law; or (ii) is managed, arranged, administered, operated or promoted by an approved person; or
6. holding directly a legal or beneficial interest in the shares of a legal entity which holds a licence under the Banks and Trust Companies Law (2018 Revision), the Companies Management Law (2018 Revision), the Insurance Law (2010 Revision), Part III of the Mutual Funds Law (2015 Revision) or the Securities Investment Business Law (2015 Revision) (“SIBL”).

¹ In force date 13 December 2017
² In force date 2 March 2018
³ Excludes for this purpose the _Directors Registration and Licensing Law, 2014_
⁴ It should be noted that Mexico, Panama, and Turkey have been removed from the list of approved jurisdictions since the publication of our May 2017 alert.