Cayman Islands Introduces Beneficial Ownership Register

Effective 1 July 2017, the new legislation for Cayman Companies and Cayman Limited Liabilities 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 NOT be publicly accessible. The information will only be made available to a specified Cayman Islands competent authority, principally on proper and lawful request made by the UK law enforcement agencies.

The introduction of the new legislation demonstrates the Cayman Islands’ continued commitment to meeting the high standards of due diligence and transparency by the international financial services industry.

Which entities are within scope (“In-Scope Entity”)
Companies which are required to provide this information are companies incorporated or registered by way of continuation under the Companies Law (2016 Revision) and the Limited Liability Companies Law (2016):

Exemptions Companies or LLCs (or their subsidiaries) which are exempted from keeping the Register are as below:

Who are beneficial owners?
A beneficial owner is a person for whose benefit the company was established and who has ultimate control over the company. A beneficial owner can be an individual or a legal entity.

Beneficial owners with respect to a company generally:

If there are no registrable beneficial owners identified, the entity must note on the Register the words “no registrable person identified”.

Required information for the Register
Details of the name, residential address and (if different) address for service of notices, date of birth, identification information from the individual’s passport/driving licence/other government ID, and date on which they became a registrable person are to be included on the register. The register must be updated within one month of any changes.

All registrable beneficial owners 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 are special reasons for an exemption from compliance with a notice.

Failure to maintain the Register
For companies incorporated prior to 30 June 2017, the Cayman Islands government has stipulated a grace period of one (1) year to enable existing companies to gather information and create a Register.

If a company fails to maintain the Register or keep it up to date due to the failure of a registrable person to provide particulars, the company must issue a restrictions notice to that person. Penalties on conviction in the form of severe fine or imprisonment may be imposed on the beneficial owners and/or company (which may include director, manager (for an LLC) or other officers) who fail to comply with the requirements.

Date: 1 July 2017