THE
Podcast
August 2024
REGULATORY 15/15
Speakers
Chris Capewell
+1 345 814 5666
chris.capewell@maples.com
+1 345 814 5179 alex.howard@maples.com
+1 345 814 5155
+1 345 814 5429
jennifer.parsons@maples.com
Content
• Department for International Tax Co-operation (DITC) Update
• Beneficial Ownership Regime (BOR) Update
Introduction
Introduction to the 15/15
• A 15-minute summary of the latest developments in the regulatory laws of the Cayman Islands released on the 15th day of every month
• A copy of the previous 15/15 released on 15 June can be accessed on our website: Maples 15/15
• Comments and suggestions to format of the 15/15 are always welcome – please email speakers directly
DITC Update
DITC Update
• Upcoming AEOI Filing Deadline
• 2023 CRS Compliance Form due 16 September 2024 (an additional day added as 15 September 2024 is a Sunday)
• The DITC also recently published updates of the following guides:
• Economic Substance Notification User Guide – June 2024
• Economic Substance Practice Points – July 2024
• DITC Portal User Guide – July 2024
• The updated guidance includes noteworthy changes in relation to economic substance notification ("ESN") filings and economic substance returns ("ES Returns"). ES Returns are filed by relevant entities carrying on relevant activities
DITC Update (Cont'd)
ESN New Requirement
ESN now requires input of the 'start date' and 'end date' of the relevant ESN year. Once these dates are entered, the system automatically populates with the default ESN year.
ESN Prior Requirement
ESN now includes new data fields for partnerships:
• identity of the general partner
• whether the general partner is carrying on the same relevant activity as the partnership
The DITC's bulk upload form has also changed to reflect these new ESN data fields N/A now requires input of the 'start date' and date' of the relevant ESN year. Once dates are entered, the system populates with the default ESN year itself now includes new data fields for the general partner is on the same relevant
Prior to the change, the required data field was just the ESN year itself.
Partnerships previously not in scope
DITC Update (Cont'd)
ES Returns New Requirement
If a relevant entity undergoes a change in relevant activity after the deadline for filing ESNs, there is now a mandatory requirement to provide the DITC with an explanation of the facts and circumstances surrounding the change in relevant activity as well as to upload supporting documents substantiating the change
ESN Returns Prior Requirement
Previously, no such explanation was required (although this requirement accords with the Maples Group’s prior advice to entities with changes in relevant activity)
The 'directed and managed' section of the ES return must now be completed by all relevant entities (other than holding companies) regardless of an entity's level of 'relevant income'
Previously, if an entity had no relevant income, i.e. if filing a nil return, this section did not need to be completed
BOR Update
BOR Update
• Effective 31 July 2024, the new Beneficial Ownership Regime has come into force:
• Beneficial Ownership Transparency Act, 2023 ("BOTA")
• Beneficial Ownership Transparency Regulations, 2024
• Guidance on Complying with Beneficial Ownership Obligations in the Cayman Islands (the "Guidance Notes")
• Important to note the delay in enforcement of the various requirements under the new regime until 1 January 2025
• What are the key changes to be aware of?
Key Points
• No look through past Reportable Legal Entities ("RLEs")
• Expanded consideration of who may be a Senior Managing Official ("SMO")
• Responsibilities of contact persons to provide "BO Information"
• Treatment of trusts / trustees
• Majority stake test lives on virtually unchanged
Next Steps
• BOTA commenced 31 July 2024. Previous regime ended with immediate effect
• Technically, all filing of BO Information has ceased until ROC advises otherwise. Note that Ministry have confirmed a reprieve from enforcement under BOTA until 1 January 2025
• All legal persons under BOTA must, before 1 January 2025:
• Provide written confirmation of legal person’s "category" under BOTA
• Identify and confirm registrable beneficial owners (if required)
• Obtain and confirm in writing all required particulars (depending on "category")
Next Steps (Cont'd)
• Maples will be reaching out to all clients in coming weeks to obtain written confirmations and required particulars in preparation of 1 January 2025
• Specific to regulated investment funds, before 1 January 2025
• Determine whether fund will apply Category C alternative route or opt out and apply Category E
• If Category C, determine Authorised Contact and agree procedure for responding to Registrar (note Maples can act in this capacity). May require review of Administration / Service Agreements
• If applying Category E, identify and confirm registrable beneficial owners and confirm in writing all required particulars. If none, provide details of SMO
This presentation was presented on, and is only accurate to 14 August 2024. The information within this presentation is provided for general guidance only, is not intended to be comprehensive and does not constitute legal advice or give rise to an attorney / client relationship.
Specialist legal advice should be taken in relation to specific circumstances. If you require legal advice, please reach out to your usual Maples and Calder contact.
Published by Maples and Calder (Cayman) LLP.
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