We can now report that Cayman has taken the decision to implement the concept of a centralised platform of beneficial ownership information by the 30 June 2017. The proposed beneficial ownership regime is welcomed as it is anticipated that this will bring an end to the intense debate that has prevailed between Cayman and the United Kingdom on the beneficial ownership issue and it also replicates similar international initiatives, including the Fourth Anti-Money Laundering Directive in the EU, which EU member states will implement by June 2017.
Under the proposed change to the Companies Law, LLC Law and Companies Management Law, with exceptions for some regulated entities company and Cayman Islands Stock Exchange listed companies, companies will have an obligation to institute and maintain a register of beneficial ownership information at the registered office of the company in the Cayman Islands which will be searchable by the competent authority in Cayman. The UK authorities and other jurisdictions that replicate the UK/ Cayman agreement will not however have direct access to the register but will be able to request a search is done by the Cayman authorities. The Cayman Islands have also confirmed that the register will not be open to the general public for inspection. They have also gone a step further and confirmed that there can be no introduction of any Public Register unless this should become an accepted and implemented global standard.
The information to be retained on the register will be limited to ultimate beneficial owners holding either directly or indirectly more than 25 per cent of the shares or LLC interests with a right to share in more than 25 per cent of the capital or profits in the company. There are similar conditions that will apply based on the ability of an individual to control the board and or exercise control over the company. As expected the beneficial ownership information will contain, name of UBO, residential address, date of birth and other identification information. Penalties will apply for any company failing to maintain such a register with fines upon conviction up to $30,490 per company and this extends to directors or manager upon conviction with imprisonment for 2 years and or a fine of US $12,195.
The introduction of the beneficial ownership register is a significant step forward in terms of Cayman’s clear intentions to comply with international transparency standards and this has been further bolstered by the recent amendments to the Common Reporting Standards Regulations, to ensure effective implementation of the OECD’s Common Reporting Standards in the Cayman Islands, as well as amendments to its Monetary Authority Law to introduce powers for the Cayman Islands Monetary Authority.