Archive for the ‘Cayman companies’ Category

Law company register established in Cayman

Thursday, August 8th, 2019

All law firms and sole practitioners operating in the Cayman Islands must register with a new legal regulator before the end of this month, as government presses on with the job of meeting the latest international rules for the financial sector. The newly-registered Cayman Attorneys Regulatory Authority (CARA) has begun to build its regulatory oversight framework that includes the register aimed at helping fight money laundering.

In accordance with the Legal Associations Law, which came into effect in February, the Cayman Islands Legal Practitioners Association (CILPA) had formed CARA to supervise the functions and build the regulatory oversight framework. The framework includes law firms registration. CILPA has 546 members, which is approximately 80% of the lawyers working in Cayman.

Registering all lawyers is just one of many developments in the offshore sector because the Cayman Islands has to address the concerns raised by the most recent Caribbean Financial Action Task Force (CFATF) review until February 2020. The CFATF review identified risks and threats to numerous areas of the financial sector and related business such as real estate and precious metal brokers.

A newly-appointed national coordinator for the Anti-Money Laundering Steering Group (AMLSG), Elisabeth Lees, has spent the last few months working, along with the Anti-Money Laundering Unit, to coordinate action in the public sector in order to implement the recommendations in the CFATF report.

If Cayman fails to address problems defined in the review, the FATF could impose a remediation plan to its detriment.

As a result, a new working group has been created in order to fight proliferation financing, an area of focus in the CFATF report.

Cayman launches CbC Reporting Portal

Thursday, May 17th, 2018

The Cayman Islands’ country-by-country (CbC) reporting portal has been launched, with the first CbC reports due from some taxpayers by the end of the month.

CbC reporting requires multinational enterprises (MNEs) that meet certain criteria to file a country-by-country report with tax authorities. CbC reporting applies only to MNE groups with annual consolidated group revenue of not less than a specified threshold amount in the preceding fiscal year, which is USD 850 million in Cayman.

CbC reports are due within 12 months of the end of the fiscal year. As a result of an earlier extension, the first deadline will be May 31, 2018 in order to provide extra time for those taxpayers whose fiscal year began in the first 5 months of the year in 2016.

According to the Finance Ministry of the Cayman Islands, a Reporting Entity resident in the jurisdiction must make a CbC Report via the CbCR Portal even if that results in duplication because a CbC Report for the same MNE Group has already been made to another Competent Authority, for instance where the MNE Group appoints a Surrogate Parent Entity in another participating jurisdiction or where a Reporting Entity resident in the islands is also resident for tax purposes in another participating jurisdiction.

It should be noted that the CbC Report provides a breakdown of the amount of revenue, profits, taxes, and other indicators of economic activities for each tax jurisdiction in which the MNE group does business.

UK to force Cayman to make beneficial ownership of companies public

Wednesday, May 2nd, 2018

The Cayman Islands and other British Overseas Territories lost the political battle in House of Commons vote on May 1.

The vote to amend Britain’s Sanctions and Anti-Money Laundering Bill to force British Overseas Territories – which are not UK Crown Dependencies – to make registers of company owners public, may fundamentally change both Cayman’s financial services business model and its relationship with the UK.

The amendment to the bill, which now goes to the House of Lords for a largely procedural vote, will require all 14 remaining British territories to make beneficial ownership of companies registered in their respective jurisdictions public. The Cayman Islands has such a registry now, but it can only be inspected by certain personnel for the purposes of specific law enforcement or tax compliance requests.

UK and Cayman sources both speculated as to the reasons for why such a decision was made and the conciliatory version of the amendment was not accepted for debate. Many noted that a crucial Brexit bill concerning the operations of the single market once the U.K. leaves the European Union next year was up for debate in the Commons as well.

From Cayman supporters’ perspectives, it was the worst possible outcome.

Cayman London office director Eric Bush told the UK public radio: “We’re exploring all options. The decisions and actions taken [Tuesday] were taken in haste, were taken with misinformation, rhetoric and Hollywood jargon. The Cayman Islands government is not going to do that.”He also added that the actions taken are certainly a blow to the relationship, which shows a lack of trust, it shows a disrespect and disregard for the constitution.

Small Cayman businesses concerned over cost of finance

Monday, July 31st, 2017

According to the president of the Cayman Islands Small Business Association (CISBA), financial institutions are setting up entrepreneurs for failure because of the cost of loans. This was one of a number of issues that Dawn McLean-Sawney raised with the new minister for commerce, Joey Hew.

McLean-Sawney said small businesses need better concessions on loans to make payments viable.

Other difficulties the small business sector faced included the following:
– inadequate funding,
– too much red tape,
– securing venues to set up businesses,
– challenges based on definitions of micro (1-3 employees) and small (4-10 employees) businesses in provision of employee benefits.

Also, the small business sector needed more incentives, including a reduction in fees such as Customs and Trade and Business Licence fees, and encouragement for more women, especially single mothers, and retirees to be able to become small business owners.

CISBA, which currently has 120 members, was created to advocate for policies that are beneficial to local small businesses as well as to support and promote entrepreneurial spirit.

Cayman-registered beneficial owners accessible to UK

Tuesday, July 4th, 2017

In the beginning of July, the new legislation came into effect in the Cayman Islands that will allow UK law enforcement authorities to access details of the beneficial owners of all financial entities registered in thejurisdiction.

The new technology-based system enhancement to the beneficial ownership regime will allow those with legitimate rights or reasons to have access to do so in a more efficient and timely fashion, with speed being the crucial point. The information is not in a central public register but this is a platform allowing direct access to the RCIPS Financial Crimes Unit so they can respond to requests.

Officials said a system had been in place for more than 15 years that provided beneficial ownership information to the United Kingdom and other countries through legal means, but the new system will increase the speed in which that information is provided.

However, the government has insisted that the system is not very different from the process in place for many years but the efficiency improvement satisfies the UK’s demand for immediate access in criminal cases.

“Financial crime is a serious global problem that requires a unified global response,” Rivers said. “As a jurisdiction, the Cayman Islands continues to play a significant role on international regulatory issues and for implementing global practices to fight financial crime; we have been recognised for decades as a strong international partner in combating corruption, money laundering and tax evasion.”

The UK wanted to have this access back in 2015. As a result, Cayman and the UK agreed in April 2016 to improve the exchange of beneficial ownership information, as outlined in a document called the Exchange of Notes and Technical Protocol. All UK Overseas Territories entered into similar agreements. Since then, Cayman has passed amended legislation, new regulations and guidance notes for industry in order to provide the legal framework upon which the system was enhanced.

US treasury secretary nominee advised to eliminate Cayman Islands and other tax havens

Wednesday, January 25th, 2017

When questioning the new Trump administration nominee for Treasury Secretary, members of the US Senate, asked Steve Mnuchin how he intends to close down Caribbean tax havens, specifically naming the Cayman Islands.

The senators focused upon the Cayman Islands in showing their displeasure of what they clearly indicated was abuse of American tax laws.

Details have recently emerged how financial service professionals working in the Cayman Islands intentionally use combinations of jurisdictions, like forming a BVI company, owned by a Belize trust, to create a totally opaque, non-transparent vehicle, tax-free, with no identifiable beneficial owner.

After the Panama Papers scandal, members of the Senate and the House of Representatives have affirmed the immediate need for effective tax reform, whether through new legislation or Treasury regulations, to eliminate the present situation. They appear to be looking for the incoming Treasury Secretary for a solution. Political pressure is clearly present on this matter.

Cayman on top of Offshore Merger deals again

Friday, October 21st, 2016

According to a report by a firm of international lawyers, Appleby, one third of all merger and acquisition deals in the offshore world in the first half of the year 2016 took place in the Cayman Islands.

Cayman retained its standing as the primary target of offshore transactions accounting for 40% of the value of that business. This was released by Appleby in its latest edition of Offshore-i, a report that analyses data on the activity in offshore financial centres.

While figures for the 1st 6 months of 2016 were down generally on what the lawyers said were “record-setting” figures in 2015 and both the number and value of offshore M&A deals fell, the Cayman Islands held on to the lion’s share of the deal volume and value.

Also, it was stated that the Cayman Islands was also home to 4 of the 10 biggest deals between the beginning of January and the end of June, including 3 in the technology sector, which enjoyed a particularly robust start to the year.

In the 1st 6 months of the year, the report claims, Cayman-incorporated companies were the target in 459 transactions worth a combined USD 41 billion. The value represented more than twice the amount of the next closest jurisdiction, the British Virgin Islands, while Hong Kong was second to Cayman in terms of deal volume with 263 transactions.

The largest deal targeting a Cayman company was the USD 4.5 billion investment in Cayman-incorporated software publisher Xiaoju Kuaizhi by a consortium including China Merchants Bank and other investors. Other significant technology deals in Cayman involved a USD 2 billion funding round for Cayman-incorporated Uber China and a USD 2 billion share buyback by Alibaba Group Holding Ltd.

While the 1st 6 months of the year 2016 saw a slowdown in completed IPOs across jurisdictions, a more positive story emerges when looking at future IPOs announced during this time period, the heavy majority of which involved a Cayman-registered company. Cayman was responsible for 102 of the 115 announced IPOs.

Despite the challenges faced by many offshore jurisdictions in the world at present, the offshore region is still ranked 6th in the world by deal volume and 4th for value activity. As the lawyers report stated, average deal size remains strong, and continuing from 2015, offshore still has the highest average deal size of any region worldwide.

Lawyers’ legislation delayed as small firms need time

Wednesday, October 19th, 2016

The minister of financial services has postponed the debate on the still controversial Legal Practitioners bill until the next meeting of the Legislative Assembly. This was because of a request by some small firms and sole practitioners as they want more time to submit suggestions that specifically impact their sector.

Wayne Panton was hoping to steer the legislation through during this current meeting after 15 years of wrangling. So, he said it was a risk to delay passage when the jurisdiction is to face the Financial Action Task Force (FATF) review in 2017. However, he noted that if a short delay improves matters, he believed it was a risk worth taking to balance the interests of sole practitioners and the need for the law now.

Cayman captives boosted by non-traditional risk

Thursday, September 22nd, 2016

According to the Cayman Islands Monetary Authority (CIMA), 2016 has been a very active year for new captive insurance formations, with 23 new licences granted over the 1st 6 months of the year. This number exceeded the issuance of licences in the whole of 2015.

Head of Insurance Supervision at CIMA, Ruwan Jayasekera, said that historically, November and December are the busiest months in terms of new captive formations, “and if the same applies to 2016, the year will be another phenomenal year for the jurisdiction in terms of new captive/(re)insurance company formations”.

He added: “CIMA is seeing a shifting trend in new captive/(re)insurance company formations, with more and more companies being formed to assume unrelated and non-traditional risks”. Changes made to the main insurance law, supporting regulations and the regulatory framework within the last five years to accommodate sophistication and innovation have had a positive impact on the insurance industry, with insurance groups, intermediaries and hedge-funds in particular choosing Cayman to house their (re)insurance subsidiaries.”

Cayman-Registered Firms number exceeds 100,000

Saturday, August 20th, 2016

The number of active companies on the Cayman Islands company register has exceeded 100,000 for the first time. Currently, there are more than 19,000 active partnerships in the jurisdiction.

According to figures from the Cayman Islands General Registry, at the end of the 2nd quarter, 101,430 companies were listed as active, which is 3% more than a year earlier and 2.6% more than at the end of 2015.

New Cayman-registered partnerships increased by 1% in the 12 months to June compared to the same period last year. A total of 3,334 new partnerships were incorporated during 2015, continuing the trend of uninterrupted annual growth since 2009/10.

As of July 1, 2016, 923 new partnerships were registered, significantly exceeding the 588 partnership terminations. The net result is that there are now more than 19,000 active partnerships set up in the jurisdiction.

The newly-introduced limited liability company (LLC) form attracted 21 registrations in the 1st month, while the number of trusts on the register dropped by 1% to 1,784 in the 1st 2 quarters of this year. This continues a trend of small declines since 2014, according to Cayman Finance, the island’s financial services promotional agency.

Jude Scott of Cayman Finance commented: “It’s always great to see growth in Cayman’s financial services industry and this is a significant milestone of which we should all be proud. Milestones such as this are further evidence of the global financial services industry’s recognition of Cayman’s transparency and robust regulatory regime.”