Out-of-scope companies

Most notably, a company that is exempt from the Regime (as amended) is now required to provide a written confirmation of the exemption identifying the grounds for exemption in a prescribed form to its corporate service provider together with instructions to file the written confirmation with the competent authority. The prescribed form and any prescribed information to be provided are to be finalized in a separate regulation.

Summary of changes

There are now three additional exemptions available to companies and limited liability companies which are:

1. regulated in a jurisdiction included in a list published by the Anti-Money Laundering Steering Group of countries and territories whose anti-money laundering legislation is deemed to be equivalent to that of the Cayman Islands;
2. the general partner of special purpose vehicle, private equity fund, collective investment scheme or investment fund that is registered or holds a license under a regulatory law or is managed, arranged, administered, operated or promoted by an approved person;
3. the holder of a direct legal or beneficial interest in the shares of a legal entity which holds a license under the Banks and Trust Companies Law, the Companies Management Law, the Insurance Law, the Mutual Funds Law (Part III only) or the Securities Investment Business Law of the Cayman Islands.

There have also been changes and clarifications to the existing exemptions:

1. company or limited liability that is registered as an excluded person under section 5(4) of the Securities Investment Business Law of the Cayman Islands (a SIBL Excluded Person) will no longer be able to rely on the regulated person exemption;
2. a SIBL Excluded Person will no longer be an ‘approved person’ within the meaning of the Regime;
3. the Directors Registration and Licensing Law of the Cayman Islands is not a ‘regulatory law’ within the meaning of the Regime;
4. an entity will not be considered to be managed, arranged, administered, operated or promoted by an approved person solely as a consequence of that entity having appointed an individual who is an employee of a legal entity that holds a license under a regulatory law as a director
5. an entity will not be considered to be managed, arranged, administered, operated or promoted by an approved person solely as a consequence of that entity having appointed an approved person to act as its registered office in the Cayman Islands.

Timeline for compliance

It is imperative all companies act now to ensure compliance notwithstanding the Regime does have a transitional ‘non-enforcement’ grace period until 30 June 2018.

An out-of-scope company will be compliant as soon as it has filed a declaration of exemption in the prescribed form with the prescribed particulars with its corporate service provider.

An in-scope company will be compliant as soon as it has instructed its corporate service provider to establish a beneficial ownership register noting the words ‘enquiries pending’ to show it is still in the process of taking reasonable steps to find out if there is anyone who is a registrable person in relation to the company (provided they do then take those reasonable steps to find such persons).

Ultimately, an in-scope company must identify all registrable persons, collect certain particulars in respect of each such person and provide such information to its corporate service provider so that its beneficial ownership register can be completed and maintained.

The role of the corporate service provider

All exempted companies and limited liability companies must maintain their beneficial ownership register at their registered office and only a licensed corporate service provider can provide this information to the General Registry, which it must do on a regular basis. As a licensed corporate service provider, we also have an obligation to review the information that is provided to us.

Intertrust offers a full suite of beneficial ownership services. If you would like to discuss engaging us to provide any of our beneficial ownership services, are interested in receiving further advice on your obligations under the new regime or have any questions, please get in touch with your usual Intertrust Cayman representative, one of our specialists below or email us at [email protected].