Jersey: The Cayman Islands Beneficial Ownership Regime

Last Updated: 3 July 2017
Article by Nick Rogers and Giorgio Subiotto

Most Read Contributor in Jersey, July 2019

The Cayman Islands beneficial ownership regime (Regime) comes into force on 1 July 2017. It establishes a secure, non-public centralised platform on which beneficial ownership information of in-scope companies (ISCs) must be maintained. From 1 July 2017, both ISCs and "Registrable Persons" of ISCs must comply with the Regime.

Many categories of Cayman legal entities fall outside the scope of the Regime. However, even legal entities that are out-of-scope may be Registrable Persons, with obligations under the Regime and material penalties for breach. Therefore, all Cayman legal entities and their direct and indirect shareholders should consider if they are affected by the Regime.

This Advisory describes which vehicles will be in-scope and which will be out-of-scope; explains who will be beneficial owners and other Registrable Persons; summarises the duties both of ISCs and those who may hold interests in an ISC; and provides practical guidance as to how to ensure compliance.

Practical steps

The following steps should be taken now:

  • For all Cayman legal entities, confirm classification – all legal entities established in Cayman must formally assess whether they are in-scope and document the results of such assessment.
  • For Out-of-Scope legal entities – maintain record that classification analysis has been completed and basis upon which the entity is out-of-scope; implement process to review classification on a regular basis; respond to requests for confirmation from the registered office provider; consider obligation as Registrable Person (see below).
  • For ISCs only, instruct the registered office to establish a beneficial ownership register.
  • For ISCs only, identify the individuals or relevant legal entities who are Registrable Persons (and send notices to persons the ISC considers may be Registrable Persons if necessary) and provide the required particulars to the registered office (see "Obligations of ISCs" for more details).
  • For all individuals and Cayman-legal entities, whether ISCs or out of scope, consider Registrable Person status – irrespective of whether they are in-scope or not, individuals and legal entities incorporated, formed or registered (including as a foreign company) in Cayman should determine if they directly or indirectly own an interest in a Cayman company or LLC. If so, they should try to determine if the company or LLC is an ISC and if the size of their interest may make them a Registrable Person. Cayman companies should document the results of such assessment (see "Obligations of Registrable Persons" for more details).
  • For all individuals and Cayman-legal entities, whether ISCs or out of scope, proactively contact any ISC in respect of which such person believes he, she or it may be a Registrable Person.
  • For all individuals and Cayman-legal entities, whether ISCs or out of scope, respond within 30 days to any legitimate notices received from an ISC requesting particulars of Registrable Persons.

Classification - out-of-scope

Many categories of Cayman legal entities fall outside the scope of the Regime.

  • Partnerships (including exempted limited partnerships) are not covered by the Regime.
  • Trusts (including unit trusts) are not covered by the Regime.
  • Bodies that are not legal persons are not covered by the Regime.
  • Foreign entities that register as "foreign companies" in Cayman are not ISCs.

The following Cayman companies (including LLCs) are not ICSs:

  • companies listed on an approved stock exchange;
  • companies that are registered with CIMA under the Mutual Funds Law;
  • companies registered with CIMA as excluded persons under the Securities Investment Business Law, such as many Cayman-incorporated investment managers and investment advisers;
  • other licensed companies in Cayman such as banks, trust companies and insurance managers;
  • companies managed, arranged, administered, operated or promoted by an approved person as a special purpose vehicle, private equity fund, collective investment scheme or investment fund (a Managed Entity);
  • companies that are general partners of Managed Entities; and
  • companies that are subsidiaries of companies that fall within the above categories, i.e. companies whose out-of-scope parent(s) hold more than 75% of the shares or voting rights of the subsidiary, or the right to appoint and remove a majority of the board of the subsidiary; or companies that are themselves subsidiaries of such a subsidiary.

For the Managed Entity exemption, an "approved person" is a person or a subsidiary of a person that is (i) regulated, registered or licensed under a Cayman regulatory law or regulated in an approved jurisdiction, or (ii) listed on an approved stock exchange.

We expect considerable attention to be focused on the Managed Entity exemption, as terms such as "managed", "administered", "special purpose vehicle" are construed. For example Cayman investment funds that have delegated discretionary management to SEC registered investment advisers in the US or FCA regulated managers in the UK will be exempt as Managed Entities. Other scenarios may not be so clear-cut. Companies that have appointed directors registered under the Directors Registration and Licensing Law will not, for that reason alone, qualify for the Managed Entity exemption.

Classification – in-scope

All Cayman companies and LLCs incorporated in Cayman or registered by way of continuation in Cayman, including ordinary companies, exempted companies and exempted segregated portfolio companies are in-scope, unless they fall within an out-of-scope category as described above.

The types of companies that are expected to be in-scope include:

  • personal holding companies;
  • private trading companies;
  • joint venture companies;
  • holding companies and subsidiaries in private corporate groups;
  • small unregulated funds that are self-administered or managed by a non-regulated manager;
  • some carry vehicles; and
  • private unlicensed businesses trading in Cayman.

Who is a Beneficial Owner?

Beneficial owners are individuals who, in respect of an ISC:

  • hold, directly or indirectly, more than 25% of the company's shares;
  • hold, directly or indirectly, more than 25% of the voting rights of the company;
  • hold, directly or indirectly, the right to appoint or remove a majority of the company's board of directors; or
  • have the absolute and unconditional legal right to exercise, or actually exercise, significant influence or control over the company.
  • have the absolute and unconditional legal right to exercise, or actually exercise, significant influence or control over a trust, partnership or other entity which owns the company.

Regulations provide details of what indirect ownership means.

What is a Relevant Legal Entity?

Relevant legal entities are legal entities incorporated, formed or registered (including by way of continuation or as a foreign company) in Cayman that would be Beneficial Owners if they were individuals. Partnerships, trusts and other bodies that are not legal persons are not relevant legal entities.

Who is a Registrable Person?

Registrable Persons in respect of a company are (i) beneficial owners, and (ii) relevant legal entities that hold an interest in the company or meet one of the above ownership and control conditions directly (set out in respect of Beneficial Owner) in respect of the company and through which any beneficial owner or relevant legal entity indirectly owns an interest in the company.

The result is that, in practice, while there may be multiple relevant legal entities in respect of a Cayman company, only the relevant legal entities at the level immediately above the company will be Registrable Persons. Individuals, on the other hand, will be Registrable Persons (as beneficial owners) even where their interest in the underlying company is held indirectly through a majority interest in multiple entities.

Obligations of ISCs

ISCs have the most extensive obligations. Each ISC must:

  • engage a licensed Cayman corporate services provider (CSP) to maintain an adequate, accurate and current beneficial ownership register for the ISC at the ISC's registered office in Cayman;
  • take reasonable steps to identify individual beneficial owners and relevant legal entities;
  • give notice to all beneficial owners and relevant legal entities requiring such persons to confirm their status as Registrable Persons and their registration details within one month of the notice;
  • provide to its CSP the required particulars of such Registrable Persons once those particulars have been confirmed;
  • instruct the CSP to enter the required details of Registrable Persons into the register, or a nil return; and
  • upon becoming aware of any change to the particulars of a Registrable Person stated in its register, give notice to the Registrable Person as soon as reasonably practicable requesting confirmation of the change.

Obligations of Registrable Persons

Beneficial owners and relevant legal entities also have their own obligations. They must respond to any notice received from an ISC; if they are Registrable Persons, they must confirm or correct their details; and they must state whether or not they know the identity of a Registrable Person or any person likely to have that knowledge.

Registrable Persons have a proactive obligation to notify an ISC that they are Registrable Persons, even where they have not received a notice from the company. Similarly, Registrable Persons must proactively notify an ISC if they know of any change in their status or particulars.

Thus it is not the case that the board of directors of a Cayman company can determine that they are out of scope and automatically proceed as if the Regime does not apply to them.


ISCs and their directors who knowingly and wilfully breach the Regime commit criminal offences and may incur significant fines. Similarly, persons who are Registrable Persons in relation to an ISC under the Regime and do not provide timely and complete information or knowingly make false statements also commit an offence.

In addition to these penalties, an ISC is required to serve a defaulting Registrable Person with a restrictions notice (copied to the Cayman authorities), the effect of which is to freeze dealings in the relevant interests.

Security of Information

Information held on the centralised platform is (i) not available to the public, (ii) air-gapped with no external connectivity to enhance security and (iii) accessible only by the Ministry of Financial Services upon formal lawful request from specific governmental authorities (currently only Cayman and the UK) in relation to financial crime, money laundering and regulatory or tax matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions