Archive for the ‘Cayman News’ Category

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.

Cayman issues Guidance on Compliance with CbC Reporting, FATCA, CRS

Tuesday, April 10th, 2018

New guidance on the obligation on large multinational groups to file a country-by-country report in the jurisdiction and also an update on Common Reporting Standard and US Foreign Account Tax Compliance Act reporting have been released by the Cayman Islands.

On March 29, guidance was released by the Cayman Islands’ Department for International Tax Cooperation (DITC) alongside the release of:

– The CbCR Notification Template (in CSV format);
– The Authorisation Letter Template; and
– The CbC XML Schema User Guide (Draft).

The guidance provides an overview of the OECD’s recommendations and of the Cayman law underpinning the CbC reporting regime (the Tax Information Authority Law (2017 Revision)), explains the obligation to notify which entity will file the CbC report, sets out the filing deadlines, how to complete the CbC report, and how the Cayman Islands intends to share the information required multilaterally.

The Cayman Islands recently pushed forward the deadline for filing CbC reports. The deadline was March 31, 2018, for those groups with fiscal years beginning in 2016 between January 1 to March 31, 2016. It was then required within 12 months of the end of any fiscal year, for those fiscal years beginning after March 31, 2016. The Ministry of Financial Services and Home Affairs has now announced the following: “A Reporting Entity resident in the islands must make its first CbC Report by May 31, 2018, if the CbCR Regulations require it to make its first CbC Report on or before May 31, 2018.” This provides additional flexibility specifically for those whose fiscal period begins in the first five months of the year.

In a separate announcement, the DITC announced that it has reopened the automatic exchange of information (AEOI) portal for notification and reporting in relation to the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS).

The deadlines are:

– April 30, 2018 for notification (i.e. enrollment);
– May 31, 2018, for reporting for the 2017 calendar year.

Cayman eases deadline for CbC Reporting

Friday, February 16th, 2018

Authorities in the Cayman Islands have pushed back the deadline for notifying local authorities of which entity will file a country-by-country (CbC) report, and for filing the first reports.

On February 2, 2018, the extensions were announced as well as a confirmation was made that in early March 2018 CbC reporting guidance will be released and the Cayman CbC reporting portal will be launched.

Under the notification obligation, the reporting entity of an MNE Group with constituent entities resident in the Cayman Islands must appoint the individuals as the “Primary Contact” and the “Secondary Contact” for those constituent entities. The Primary Contact may be an agent of the reporting entity while the Secondary Contact must be a fiduciary or management-level employee of the Reporting Entity. Neither the Primary Contact, nor the Secondary Contact must be resident in Cayman.

The CbC Report must be made via the CbCR Portal by uploading an XML file in the format prescribed by the OECD.

The CbC report is one element of a new 3-tiered standardized approach to transfer pricing documentation proposed under BEPS Action 13. Under the framework, MNEs are required to provide aggregate information annually for each jurisdiction where they do business, relating to the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group. The reporting covers information on entities doing business in a particular jurisdiction as well as the business activities each entity engages in.

Cayman Islands argues Tax Haven title

Sunday, October 29th, 2017

Jude Scott, CEO of the Cayman Islands’ financial services promotion agency, Cayman Finance, has decided to aim at a report labeling the territory as a “tax haven.”

Besides labelling as “tax haven”, the report on international financial centers, issued by the non-profit US Public Interest Research Group and the Institute on Taxation and Economic Policy, criticizes the jurisdiction for being slow to release private financial records and facilitating financial secrecy.

As to the criticism leveled at the territory, Scott noted that, not only is the Cayman Islands “transparent,” it has adopted more than 20 global financial standards and adheres to both the US FATCA rules and the OECD’s Common Reporting Standard.

“We meet none of the descriptions used by entities such as the OECD or Transparency International to define a tax haven. In fact, our system purposefully lacks any laws or regulations like double taxation treaties or foreign incentives that support the shifting of a tax base by foreign entities to avoid corporate taxes in their home jurisdictions,” said Scott.

“Reports such as this conveniently overlook how international finance centers like the Cayman Islands observe their commitment to global standards for transparency and cross-border information sharing with law enforcement and tax authorities,” added Scott.

Scott emphasized that the legislation and regulations adopted by the Cayman Islands make the jurisdiction a strong international partner to address any concerns.

Cayman imports fall by 2% in 1st quarter 2017

Thursday, August 10th, 2017

The total value of all goods imported into Cayman in the 1st quarter of 2017 was CI$ 207.8 million, which is a drop of some CI$ 4.3 million as compared with the same period last year.

According to officials from the Economics and Statistics office, the decrease was due to a 6.1% reduction in the total value of non-petroleum products, which make up almost 89% of all imports into the country. The fall in imports of machinery and road vehicles, chemical and related products, and other commodities fell significantly.

The quarterly trade statistics bulletin reported a 4% increase in food imports and a massive 50% increase in petroleum and related-products, due in part to another increase in the price of oil on the global market.

However, this was not enough to offset the decline in other goods. With import duty a significant source of government revenue, the fall in the value of goods could have an impact on the public purse for those first three months of the year to the tune of more than $1 million.

Cayman has the Least Complex Tax Jurisdiction worldwide

Wednesday, August 2nd, 2017

In accordance with TMF’s Financial Complexity Index 2017, the Cayman Islands is the least complex jurisdiction as regards taxation and accounting requirements.

TMF’s Financial Complexity Index 2017 ranks 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific, and the Americas. The Cayman Islands is ranked 94th, which means that this territory has simplified tax reporting requirements and has low rates of tax.

Other least complex jurisdictions are Jersey (90th), Hong Kong (91st), the UAE (92nd), and the BVI (93rd).

The most complex jurisdictions are Turkey (1st), Brazil (2nd), Italy (3rd), Greece (4th) and Vietnam (5th).

Cayman Hedge Fund conference attracts 530 delegates

Wednesday, April 26th, 2017

GAIM Ops Cayman, one of the largest financial conferences on Cayman’s events calendar, opened on April 24 at The Ritz-Carlton, Grand Cayman.

The leading 3-day conference for hedge fund operations and compliance is bringing 530 delegates from the industry to Cayman for presentations, workshops and networking sessions. The delegates are mostly senior executives, managers and investors in the hedge fund industry by more than 120 speakers.

Sheelah Kolhatkar, author of the newly released book “Black Edge,” on the largest insider trading investigation surrounding hedge fund manager Steven A. Cohen and his fund SAC Capital, will discuss what can be learned from government’s focus on insider trading cases over the last eight years.

Cayman Islands not eligible for 10 Island Challenge funding

Tuesday, April 25th, 2017

The Cayman Islands could still be involved in entrepreneur Richard Branson’s Ten Island Challenge, though the jurisdiction is not eligible for grant funding from the renewable energy initiative.

According to Kurt Tibbetts, Infrastructure Minister, the government of the Cayman Islands has been holding regular talks with experts from Mr. Branson’s program, which provides guidance and financial support to island nations that commit to converting to green energy. There is no financing available to Cayman through the initiative, he said. One of the benefits of being associated with the Ten Island Challenge is that several of the countries that are part of that receive grants.” Mr. Tibbetts said: “The Cayman Islands is not considered to be a part of that, so anything we need then to do we have to ask how much it costs.”

Tourism Minister Moses Kirkconnell first revealed ambitions for the Sister Islands to be part of the challenge in June last year, highlighting the possibility that they could eventually transition to 100% reliance on renewable energy sources. “The vision for Little Cayman and the Brac is that they would be branded as part of the Ten Island Challenge,” he said at the time.

When announcing the Caribbean Transitional Energy Conference to be held in Cayman in May, Mr. Tibbetts said that there is still the ambition for the Sister Islands.

The Dart group, now one of the major landowners in Little Cayman after purchasing Point of Sand, The Paradise Villas hotel, Hungry Iguana restaurant and another 600-acre property in the last few years, is also interested in helping bring renewable energy to the island.

Sir Richard Charles Nicholas Branson is an English business magnate, investor and philanthropist.

CIMA stars creating online payment system

Wednesday, April 12th, 2017

The Cayman Islands Monetary Authority (CIMA) has announced the launch of a fee payment section of the Regulatory Enhanced Electronic Forms Submission (REEFS) system for authorised financial services industry users.

The payment section is being rolled out in 2 phases:

– Phase 1, now underway, allows authorised users to view all applicable due and overdue fees and historical payments. Users can also track relevant fees and sort by groups, such as fee category, due date and covered entity.

– Phase 2, which is expected to take place during the third quarter of 2017, will allow all authorised users to make online payments. To guarantee a smooth transition, users will be provided with the necessary training and guidance on the new fee payment module. This will include instructions on assigning fee payment roles and work flows.

CIMA Managing Director Cindy Scotland said :“Although there is still work to be done before its final stages, I trust that this new service will allow the Cayman Islands to maintain its position as a leading jurisdiction within the global financial services industry”.

LA to tackle a dozen offshore laws

Wednesday, February 22nd, 2017

The financial services minister will be dominating the legislative agenda of the Legislative Assembly with almost a dozen offshore laws set to be debated by legislators ahead of evaluation by the Caribbean Financial Action Task Force (CFATF) later in 2017. The Government of the Cayman Islands is expected to deal with a significant amount of business over the next few weeks before the LA is prorogued ahead of Nomination Day next month and the formal launch of the campaign for the General Election.

Wayne Panton’s ministry has prepared eleven bills, mostly relating to the regulatory framework surrounding new financial services vehicles, and to improve the business environment. Laws such as the Companies Management (Amendment) (No. 2) Bill, 2017; the Companies Amendment (No. 2) Bill, 2017; and the Limited Liability Companies (Amendment) Bill, 2017 are related to creating the framework for the internal beneficial ownership registers in line with Cayman’s beneficial ownership information exchange agreement with the United Kingdom.

Laws such as the Cayman Islands Limited Liability Partnership (LLP) Bill, 2017, which introduces a new business structure designed to increase the attractiveness of the Cayman Islands to professional service providers, are designed to support new financial services vehicles. The Foundation Companies Bill, 2016 is designed to introduce a new type of company that that offers trust and estate planners to what was described as a more satisfactory structure.

The Limited Liability Companies (Amendment) (No. 2) Bill, 2016; the Trusts (Amendment) Bill, 2016; the Exempted Limited Partnership (Amendment) Bill, 2016; and the Tax Concessions (Amendment) Bill, 2016 are designed to delegate the authority of Cabinet to the Cabinet Office for processing tax concession certificates.

Also, the minister is bringing an amendment to the Trade and Business Licensing Law to clarify and extend the Trade and Business Licensing Board’s functions and exemptions for the agricultural sector and to remove the requirement for police clearance certificates for those with an interest in listed or regulated companies, provide proper classification for pay day loans, and allow utility bills to be substituted for bank references.

Last, but not least, and certainly the most controversial, is the Legal Practitioners Bill, 2016, which was deferred for further public consultation from the last meeting. Intended to modernise the regulation of the practice of law, it will also address the Financial Action Task Force (FATF) recommendations ahead of the assessment.

The bills, which can all be found on the government gazette’s website, are as follows:

– the Companies Management (Amendment) (No.2) Bill, 2017;
– the Companies Amendment (No. 2) Bill, 2017;
– the Limited Liability Companies (Amendment) Bill, 2017;
– the Cayman Islands Limited Liability Partnership Bill, 2017;
– the Foundation Companies Bill, 2016;
– the Limited Liability Companies (Amendment) (No. 2) Bill, 2016;
– the Trusts (Amendment) Bill, 2016;
– the Exempted Limited Partnership (Amendment) Bill, 2016;
– the Tax Concessions (Amendment) Bill, 2016;
– the Legal Practitioners Bill, 2016;
– the Trade and Business Licensing Amendment Bill, 2017.