Cayman Islands Company Law [read]

The Beneficial Owner Regime [read]

International Tax Cooperation (Economic Substance) Law (texts of "the ES Law") [read]

  • Detailed implementation guideline of the ES Law [read]
  • Tax Information Authority's Guidance of the ES Law [read]
  • Share of Information & FHTP Monitoring Process [read]
  • ES Notification & Reporting Guideline (Dept of International Tax Cooperation) [read]

CRS & FATCA Reporting [read]

 

 

 


 

 

The Cayman Islands Company Law 

 

 

 

The Beneficial Ownership Regime [read]

  • Companies (Amendment) Law2017 (Law 2 of 2017) [read] * 
  • Companies (Amendment) (No.2) Law, 2017 (Law 42 of 2017) [read]
  • Companies (Amendment) Law, 2017 (Commencement) Order, 2017 [read]
  • Beneficial Ownership (Companies) (Amendment) Regulations, 2018 [read]
  • Beneficial Ownership (Companies) Regulations (2019 Revision) [Read], consolidated with Beneficial Ownership (Companies) (Amendment) Regulations, 2018 

     *  The chapter of Economic Substance included in Part XVIIA of the Companies Law

 

 

 

Economic Substance Legislation

  • The International Tax Co-operation (Economic Substance) Act (2021 Revision) [read], "ITCA 2021" for short
  • The International Tax Co-operation (Economic Substance) Law, 2018 [read] (Consolidated into "ITCA 2021")
  • The International Tax Co-operation (Economic Substance) (Prescribed Dates) Regulations, 2018 [read] (Consolidated into "ITCA 2021")
  • The International Tax Co-operation (Economic Substance) (Amendment of Schedule) Regulations, 2019 [read] (Consolidated into "ITCA 2021")
  • The International Tax Co-operation (Economic Substance) (Amendment of Schedule) (No. 2) Regulations, 2019 [read] (Consolidated into "ITCA 2021")
  • The International Tax Co-operation (Economic Substance) (Amendment of Schedule) (No. 3) Regulations, 2019 [read] (Consolidated into "ITCA 2021")

 

Cayman Islands Tax Information Authority (TIA)

  • Economic Substance Guidance (version 3.0), issued on 13th July 2020 by the Cayman Islands TIA [read]
  • Legislation and Resources [read]


 

 

 

Legal Rules to introduce Beneficial Owner Regime and Economic Substance Regime

 

Beneficial Owner Regime

 

Effective from 1st July 2017, Cayman Islands Companies or Limited Liability Companies (the Legal Rules) are under a legal obligation to set up a beneficial ownership register (the BO register), identify registrable persons, send out notice to obtain confirmation of their status and particulars, and record the required particulars and any relevant change thereafter, and periodically upload the current information to a centralized search platform maintained by the Cayman Islands authorities.

 

Cayman Islands Government introduced the beneficial ownership regime to the domestic Companies Law by the addition of Part XVIIA - Beneficial Ownership Registers to the Companies Law. See the Companies (Amendment) Law, 2017 (Law 2 of 2017) and the Companies (Amendment) (No.2) Law, 2017 (Law 42 of 2017).

 

For any instances of exemption from the requirement for establishing the beneficial ownership register and keeping the beneficial ownership register updated, please refer to details of Part XVIIA

 

For the Beneficial Ownership Regime, See detailed information [Read]

 

 

 

Economic substance test

 

The International Tax Cooperation (Economic Substance) Law, 2018 provides that a relevant entity that engages in a relevant activity for a financial period commencing from 1st Jan 2019 must comply with the economic substance test with regard to that activity.

 

For the definition of relevant activity, see the Schedule to the Economic Substance (Companies and Limited Partnership) Act, 2018 

"relevant activity" means - 

(a) banking business; 

(b) distribution and service centre business;

(c) financing and leasing business;

(d) fund management business;

(e) headquarters business;

(f) holding company business;

(g) insurance business;

(h) intellectual property business; or

(i) shipping business;

but does not include investment fund business

 

See detailed information [Read]

 


 

 

 

Tax Information Authority (the TIA)

 

The TIA has the administrative power to perform the following functions:

 

A. Determination of whether the ES Test is satisfied

The Authority shall have the power, in accordance with the ES Law, the ES Regulations and this Guidance, to make a determination as to whether a relevant entity satisfies the ES Test for any financial year in respect of which a report is required under the ES Law.

 

B. Sharing of information

 

1. Other Competent Authorities

 

The Authority will systematically spontaneously exchange information provided to it under the ES Law in accordance with relevant international standards and scheduled agreements under the Tax Information Authority Law (2017 Revision) with other competent authorities in respect of relevant entities that fail to satisfy the ES Test in relation to relevant activities and in relation to high risk IP business. Information will also be shared with the competent authority of the jurisdiction where an entity claims to be tax resident or subject to income tax on its relevant income.

Recipient competent authorities could be in the jurisdiction of residence of the relevant entity’s parent company, ultimate parent company, and ultimate beneficial owner and could also be in the jurisdiction where the relevant entity (or the entity claiming not to be a relevant entity by reason of its tax residence) itself is incorporated or claims to be tax resident, if that is outside the Islands. To activate the exchanges set out above, recipient jurisdictions would need to opt in to receive spontaneously exchanged information.

 

2. FHTP Monitoring Process

 

The OECD Forum on Harmful Tax Practices (FHTP) will conduct annual monitoring of the enforcement of the “substantial activities” requirements in practice by no or nominal tax jurisdictions, such as the Cayman Islands, in addition to monitoring of preferential regimes of most other jurisdictions that are members of the Base Erosion and Profit Shifting (BEPS) Inclusive Framework. This monitoring process considers details on the monitoring mechanism to ensure compliance, and statistical data to support this. 

 

See detailed information [Read]