The Beneficial Ownership Transparency Act, 2023 (the “Act”) and the Beneficial Ownership Transparency Regulations, 2024 (the “Regulations”) were brought into force on 31 July 2024 (the “Commencement Date”). Guidance on Complying with Beneficial Ownership Obligations in the Cayman Islands (the “Guidance”) was also published by the Cayman Registry (the Competent Authority for beneficial ownership in the Cayman Islands) (the Guidance, the Act and the Regulations, together the “New BOR Legislation”).
Registrable Beneficial Owners
A RBO in relation to a Legal Person means an individual Beneficial Owner or a Reportable Legal Entity (“RLE”).
Individual RBO
The Act defines a “Beneficial Owner” as an individual who meets any of the following specified conditions:
the individual ultimately owns or controls, whether through direct or indirect ownership or control, twenty-five per cent or more of the shares, voting rights or partnership interests in the Legal Person;
the individual otherwise exercises ultimate effective control over the management of the Legal Person; or
the individual is identified as exercising control of the Legal Person through other means.
Where an individual operates solely in the capacity of a “Professional Advisor” (which includes a lawyer, accountant, professional advisor or a financial advisor who provides advice or direction in a professional capacity) or a “Professional Manager” (which includes a liquidator, receiver or restructuring officer who exercises a statutory function), such individual will not be considered to meet the definition of a Beneficial Owner under the Act.
The Act also considers the following persons as individuals:
a corporation sole;
a government or government department of a country or territory or a part of a country or territory;
an international organisation whose members include two or more countries or territories (or their governments); and
a public authority.
Investment Funds
Legal Persons which are registered as mutual or private funds (“Registered Funds”) with the Cayman Islands Monetary Authority (“CIMA”) may provide their CSP with details of a “contact person” rather than their RBOs. The contact person will not be required to maintain a beneficial ownership register, but must provide the Competent Authority with the requested beneficial ownership information within twenty-four hours of a request being made, or at any other time as the Competent Authority may reasonably stipulate. Campbells Corporate Services Limited proposes to act as the contact person for its Registered Fund clients and further particulars will be provided by us in due course on implementing this arrangement.
Alternatively, Legal Persons who may otherwise avail themselves of the Alternative Compliance Route may decide to opt in to the BOR and provide details of their RBOs to their CSP.
Statutory Offences and Penalties
The Act includes various offences and penalties and directors, managers, officers and partners of the Legal Person may also be liable to the same penalty as the Legal Person. The Competent Authority also has the power to impose administrative fines on any person who breaches the relevant provisions of the New BOR Legislation. The Competent Authority may strike an in-scope entity off the Register if an administrative fine remains unpaid for 90 days.
Public Accessibility
The Act 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 expected that there will be some limited access for persons with “legitimate interests” in due course and we will provide further information on this as and when available.
CV5 Capital can assist with all of these aspects. Please do not hesitate to contact your usual contact if you have any questions or require any additional assistance.
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