The Cayman Island government under international opinion and pressure that much of money laundering and base erosion of tax revenue through profit shifting occurs due to lax fiscal laws and regulatory oversight. Therefore, the amendment passed in September 2019 aims to strengthen Cayman Islands anti-money laundering (AML) and counter-financing of terrorism regime.
The suite of laws which are amended in the island nation are Companies (Amendment) Law, the Limited Liability Companies (LLC) Law, 2019 as well as the Limited Liability Partnerships Law (LLP) Law, 2019; thereby bringing changes in filing, corporate information and maintenance with regards to such Cayman entities.
The snapshot or the summary of these significant amendments are as follows:
- The Registrar of Companies (RoC) shall provide information to regulatory bodies such as Cayman Islands Monetary Authority, Anti-Corruption Commission, Financial Crimes Unit of the Royal Cayman Islands Police Service, Financial Reporting Authority, Tax Information Authority and any other upon request.
- Voting rights of each shareholder shall be recorded in the register of members of a company.
- Directors of existing Cayman companies will need to review each class of their shares to update registers of members as appropriate.
- The filing period for incorporating changes in the register of directors been reduced from 60 days to 30 days. The breach of this shall invite penalty CI$500/US$610.
- The penalties for failure to establish beneficial ownership register has been hiked to CI$25,000/US$31,000 for a first offence, for a second offence CI$100,000/US$122,000 and strike off by direction of the court for a third offence.
The amendments are aimed to address certain recommendations in identified by the Caribbean Financial Action Task Force (CATF) in its 2019 Report.
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