The current beneficial ownership regime in place in the Cayman Islands will be consolidated into the Beneficial Ownership Transparency Act, 2023 (the “Act”) and will replace previous legislation. The Act will be implemented in a phased manner by allowing different commencement dates for different provisions.
The Beneficial Ownership Regime
The regime currently applies to companies, LLCs and LLPs. The Act will introduce a new definition of “legal persons” who will be required to comply with the regime, which includes companies, foundation companies, LLCs, LLPs and limited partnerships and exempted limited partnerships.
A legal person will be required to identify and provide appropriate information or particulars relating to the beneficial owners or to identify any alternative route to compliance undertaken by the legal person.
Alternative Routes to Compliance
Legal persons may avail themselves of alternative routes to compliance with the Act. Legal persons will have to provide written confirmation to their Cayman Islands corporate services provider of the category into which they fall and also provide the appropriate particulars specific to the relevant category of legal person as set out below:
|Category of legal person||Particulars|
|A legal person listed on the Cayman Islands Stock Exchange or an approved stock exchange or a subsidiary of such listed entity||• Name of stock exchange|
• Jurisdiction of stock exchange
• If applicable, details of relationship to the listed entity
|A legal person licensed under a regulatory law||• Details of the regulatory law|
|An investment fund registered with CIMA under the Mutual Funds Act (as amended) or the Private Funds Act (as amended)||• Contact details of the licensed fund administrator; or|
• Contact details of such person licensed or registered under a regulatory law such as the BO or PPoC
Regulated Investment Funds
Regulated investment funds must appoint a BO PPoC responsible for responding to requests for beneficial ownership information from the competent authority in relation to that legal person. The BO PPoC must either be a fund administrator licensed under the Mutual Funds Act or another person located within the Cayman Islands who is licensed or regulated under a regulatory law.
SIBA Registered Persons
SIBA Registered Persons will not have an alternative route to compliance with the Act and, therefore, must maintain a beneficial ownership register when the respective provisions of the Act come into force.
Key changes in the Act
A. Extension of the scope of the Act to cover legal persons as discussed above;
B. The definition of “Beneficial Owner” will include an individual person if any of these conditions are met:
(I) the individual ultimately owns or controls (directly or indirectly) 25% or more of the shares, surplus property, voting rights or partnership interests in the entity.
(ii) the individual otherwise exercises ultimate effective control over the management of the entity.
(iii) the individual is identified as exercising control over the entity through other means where there is no individual who exerts control or ownership under (i) or (ii) above.
C. Particulars which must be obtained regarding relevant legal entities and beneficial owners are set out below:
|Current requirements||Additional requirements|
|Beneficial owner||• Full legal name|
• Residential address
• Address for service of notices
• Date of birth
• Identification number, country of issue, dates of issue and expiry (must be government issued document)
• Dates when the person became and ceased to be a beneficial owner
• Nature of the individual’s ownership or control of the legal person
|Reportable legal entity||• Corporate/firm name|
• Registered or principal office
• Legal form and governing law
• If applicable, register of companies and registration number
• Dates when the entity became and ceased to be a relevant legal entity
|• How the reportable legal entity owns or exercises control of the legal person|
• Register in which it is entered and register number
Obligations under the Act
A legal person without an alternative route to compliance will have to provide the above particulars related to its registerable persons to the corporate services provider that maintains the entity’s beneficial ownership register in the Cayman Islands.
Consequently, the corporate services provider must review those particulars and take reasonable measures to verify the identity of the registrable persons using information from reliable sources. The corporate services provider must therefore be satisfied the particulars are adequate, accurate and current before entering them in the beneficial ownership register.
The Cayman Islands Government intends to publish supplementary regulations to accompany the Act and we may need to update this notice at that time.
For assistance in understanding your obligations under the Act or to enquire about Bolder’s BO and PPoC services please contact Stefanie Suckoo at firstname.lastname@example.org or (345) 769-1618.
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