The Cayman Islands is a strong partner in combatting global financial crime. The jurisdiction has implemented the highest global standards for transparency and cross-border co-operation which are regularly reviewed and enhanced.
The Cayman Islands has implemented the highest global standards for transparency and cross-border co-operation, which are regularly reviewed and enhanced.
In order to comply with international standards and commitments to combat money laundering, tax evasion and terrorist financing, the Cayman Islands implemented a beneficial ownership reporting regime in 2017 which requires: (i) each Cayman Islands company, limited liability company, foundation company and limited liability partnership to, amongst other things, instruct its corporate service provider (CSP) to establish and maintain a beneficial ownership register at its registered office unless an exemption applies; and (ii) the competent authority to maintain a centralised electronic platform on which this beneficial ownership information is stored (the Beneficial Ownership Reporting Regime). The beneficial ownership information stored on this platform is not currently publicly available but can be searched by the competent authority on its own behalf or on behalf, and at the request of, specified Cayman Islands or UK law enforcement authorities. There are possible fines and imprisonment for breaching the Beneficial Ownership Reporting Regime.
Following industry consultation, the Beneficial Ownership Transparency Act, 2023 (BOTA) was gazetted on 15 December 2023, updating the Beneficial Ownership Reporting Regime in line with evolving international standards and the Financial Action Task Force recommendations. The BOTA is expected to come into force in summer 2024. When it comes into force, the BOTA will expand the scope of the Beneficial Ownership Reporting Regime by bringing exempted limited partnerships and limited partnerships within the scope of the regime and also by removing a number of the current exemptions to establishing and maintaining beneficial ownership registers. The BOTA also provides that certain regulated entities will be able to access beneficial ownership information.
Following an international campaign to encourage more countries to commit to publicly accessible registers by the end of 2023, the Cayman Islands Government made a commitment in 2019 to introduce public registers of beneficial ownership information when it becomes the international standard. However, a judgment of the Court of Justice of the European Union in November 2022 on this topic has raised questions on the constitutionality of implementing a public register. Consequently, the BOTA currently provides that beneficial ownership information can only be made available to the public if and when regulations have been proposed by Cabinet and affirmed by a future resolution of Parliament. It is anticipated that the Cayman Islands will pass a resolution to allow public access on a "legitimate interest" basis only in due course.
