Further to our previous updates1 regarding measures adopted by the Cayman Islands Government ("CIG") in response to COVID-19, we wanted to provide a further update regarding certain measures of particular relevance to the financial services industry.

Notification of Certain Changes to the Registrar of Companies

As noted in prior updates, the deadline for notifying the Registrar of Companies ("ROC") in respect of certain changes was extended to 31 May 2020.  This extension related to any changes occurring on or after 1 March 2020 relating to:

(a) Directors and other officers of companies and managers of limited liability companies;

(b) Registered office address;

(c) Memorandum and articles of association; and

(d) Increases in share capital.

No further extension has been implemented, with the effect that notification must now be made within the normal applicable deadlines, being 30 days from the date of the relevant change.

Annual Return and Economic Substance Filings

There has also been no further extension to the previously announced deadline of 30 June 2020 after which penalties will apply in respect of annual return filings for Cayman Islands entities.  Economic substance notification filings remain a pre-requisite to those annual return filings in respect of companies and limited liability companies.  Where fees / returns remain outstanding on 1 July 2020, penalties will be assessed at 33.33% of the annual fee, with penalties rising to 100% of the annual fee on 1 October 2020.

Please note that, notwithstanding the extended deadline, entities will only be deemed to be in good standing by the ROC once all annual return filings and economic substances filings have been duly completed and associated fees (including any applicable late filing penalties) paid.

Mail Services

International mail services to and from the Cayman Islands are currently suspended as part of CIG's closure of the Cayman Islands' airports.  The airport closures are likely to remain in place until at least 1 September 2020.  This means that mail sent to our clients at their registered office address in the Cayman Islands provided by a member of the Maples Group (or care of any member of the Maples Group in the Cayman Islands) is not currently being received by us in the usual way and likely remains in its country of origin, in transit or has been returned to sender.  

If you are expecting any urgent or important mail to be delivered to an address in the Cayman Islands, you may wish to contact the sender and arrange either for postage to an alternative address outside the Cayman Islands or for documents to be sent by courier as an interim measure.  Although the airport in Grand Cayman is closed to passenger traffic, courier flights are arriving and departing on a regular basis.  

We understand CIG is actively investigating the feasibility of re-establishing international mail service and is working with partners in the United States and the United Kingdom in relation to mail from those jurisdictions.  We hope that more details will be available soon as COVID-19 related restrictions in the Cayman Islands and beyond begin to lift.

Beneficial Ownership Regime Amendments

Amendments to the Companies Law (2020 Revision) and the Limited Liability Companies Law (2020 Revision) were passed by CIG on 22 May 2020.  These amendments, which will come into force on 29 June 2020, pave the way for the introduction of an administrative fines regime in connection with the Cayman Islands beneficial ownership regime (the "BO Regime").  The ROC will be granted the power to impose fines on persons in breach of obligations under the BO Regime, including companies and limited liability companies who fail to take reasonable steps to identify beneficial owners and provide required particulars of such beneficial owners to their corporate service providers in the Cayman Islands or, where applicable, provide written confirmation of their exemption from the BO Regime.  

Beneficial owners and other entities in the ownership and control structures of entities subject to the BO Regime ("In-Scope Entities") may also attract fines where they fail to co-operate in providing relevant information to In-Scope Entities.

In all instances, initial fines will be approximately US$6,100 for an initial breach, with continuing breaches attracting further monthly fines of approximately US$1,220 up to a maximum of US$30,500 for a single breach.  Where a fine remains unpaid by a company for 90 days, the ROC may strike off such company from the register, which will result in automatic dissolution.

Consequently, it is now important for all companies and limited liability companies to review their compliance with the BO Regime, including the accuracy of any beneficial ownership register or written confirmation of exemption maintained with their corporate services provider in the Cayman Islands.

We will be issuing a more detailed Client Update regarding updates to the BO Regime shortly.

Further Assistance

If you would like further information on any CIG measures relating to COVID-19 or the impact of the amendments to the BO Regime, please contact your usual Maples Group contact or any of the contacts listed below.

Print Ready Version.

1 COVID-19 Cayman Islands Update: Further Financial Services Deadline Extensions
   Cayman Islands Economic Substance Requirements for Certain Entities Overview
   Cayman Islands Update: AEOI 2020 Amendments


CONTACTS

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Christopher Capewell

Partner

+1 345 814 5666

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Delia McMahon

Associate

+1 345 814 5494

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Michael Richardson

Partner

+1 345 814 5532

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Scott Macdonald

Partner

+1 345 814 5317

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Matthew Gardner

Managing Partner

+1 345 814 5453

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Harjit Kaur

Partner

+44 20 7466 1655

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Tahir Jawed

Managing Partner

+971 4 360 4071

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Anthony Webster

Partner

+852 2971 3001

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Matt Roberts

Partner

+852 3690 7405

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Michael Gagie

Managing Partner

+65 6922 8402

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Tom Katsaros

Partner

+65 6922 8403

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