Covid-19: Cayman Islands defers annual fees and extends deadlines
02 April 2020
New beneficial ownership definition from 15 May 2020
As part of its measures to support the local and international financial services industry during the Covid-19 pandemic, the Cayman Islands (“Cayman”) Government has deferred the deadline for payment of annual return fees for all corporate entities and exempted liability partnerships (“ELPs”) until 30 June. It has also granted an extension to 30 June for corporate entities and ELPs to complete their annual return declarations and economic substance notification filings. These changes are in addition to extensions for Beneficial Ownership submissions, reported in our earlier piece Covid-19: Cayman Islands extends some deadlines on BOI and ES.
The Cayman Islands Monetary Authority (“CIMA”) has also extended the deadlines on some regulatory returns.
Separately, Commencement Orders approved by the Cayman cabinet will bring a new definition for beneficial ownership as of 15 May 2020.
Cayman open for business
These changes are the latest measures being taken by the Cayman government to help the local and international financial services industry in the face of Covid-19. The new deadlines have been introduced by the Cayman Ministry of Financial Services (“Ministry”), the Cayman Registrar of Companies (“ROC”) and the Department of International Tax Co-operation (“DITC”).
There is a new of deadline 30 June 2020 to pay annual fees, file annual returns and/or file economic substance notifications (“ESN”s) which applies to all corporate entities registered in Cayman, including limited liability companies and foundation companies and to ELPs. The notifications from the ROC remind the industry that ESN submissions remain a prerequisite for companies successfully filing an annual return.
Companies and ELPs that fail to file their annual returns by the 30 June deadline will be will be subject to penalties as of 1 July 2020.
In addition to the filing extension, ROC has advised that that it will accept affidavits or other documents that have been notarised/certified online or utilising audio-video technology during this time.
The DITC advises that it has activated its business continuity plan and expects to maintain its operational frameworks and international obligations. Confidentiality and data safeguards remain critical for DITC functions and strict security measures will continue to apply to all remote working. It has contacted all external service providers to confirm their coronavirus contingency plans and obtain assurances of continuity of service.
FATCA/CRS/CbCR/ES/Exchange of Information on Request
The DITC advises that it does not currently propose to make any changes to previously announced deadlines for the Foreign Account Tax Compliance Act, Common Reporting Standard, Country by Country Reporting, Economic Substance or Exchange of Information on Request. It advises that it will make any appropriate adjustments in the event that applicable international deadlines are modified. We are not aware of any deadline changes by the United States of America’s Internal Revenue Service but we note that their FAQs show Covid-19 related changes to deadlines for financial institutions in Model 2 Intergovernmental Agreement (IGA) jurisdictions (under Reporting Q.4).
CIMA Extensions and Changes
CIMA has announced in Press Releases dated 25 and 30 March 2020 that it will allow a one-month extension for filing deadlines for some regulatory returns with due dates through 30 June 2020. A full list of extensions as at 25 March 2020 is available here. CIMA advises that it expects Licensees and registrants to file returns before the due deadline wherever possible and notify CIMA where an extension is required.
CIMA advises that there are no fees associated with the published extensions for filing regulatory returns, but that all other fees remain in effect and are payable upon the relevant regulatory filing being made.
All meetings will take place by teleconference. CIMA’s inspection program has become primarily desk-based and the scope of some inspections narrowed. In exceptional circumstances, CIMA will postpone planned reviews but only with special dispensation.
CIMA will accept affidavits or other documents that have been notarised/certified via the DocuSign process or utilising audio-video technology during this time.
New Fund Submissions
In lieu of a notarised affidavit, CIMA will accept a written confirmation from an operator of a fund, applying to be registered/licensed pursuant to the Mutual Funds Law or Private Funds Law, which authorises the registered office or other service provider to file the fund’s registration/application on behalf of the operator.
CIMA will accept uncertified resolutions that confirms the de-registration/cancellation date of a fund.
Change in Beneficial Ownership Definition
On 26 March 2020 the Cayman Cabinet approved commencement orders for the Companies (Amendment) Law, 2020 and the Limited Liability Companies (Amendment) Law, 2020 which widen the scope of beneficial ownership in Cayman.
As a result, the definition of a beneficial owner in the Companies Law and the Limited Liability Companies Law will change on 15 May from “more than 25%” of the shares or voting rights in a company to “twenty-five per cent or more” of the shares or voting rights in a company.