Cayman Islands - 05/15/2019 (PRDistribution.com)
Cayman Islands Economic Substance – Cayman Directors & Professional Services
On 1 January 2019, The International Tax Co-Operation (Economic Substance) Law, 2018 of the Cayman Islands (ESL) and related Regulations came into force. Additional Regulations and Guidance were issued on 22 February 2019. The ESL requires certain entities incorporated or registered in the Cayman Islands and carrying on specified activities to have ‘adequate substance’ in the Cayman Islands. One of the specified activities that may be relevant to your business is “fund management business”. The key concept is that relevant entities conducting relevant activities must be in compliance with the Cayman ESL, otherwise the Authority will administer penalties (approx. USD $12,200/KYD $10,000) for failure to meet the requirements in Year 1. Penalties will rise in Year 2 and entities may be struck off for continued non-compliance.
Economic Substance Test
A relevant entity conducting fund management business is required to satisfy the economic substance test in relation to such fund management business. It must:
conduct core income generating activity in the Cayman Islands which includes:
be directed and managed in an appropriate manner in the Cayman Islands which will require, among other things:
having regard to the level of relevant income derived from the relevant activity carried out in the Cayman Islands
“Bell Rock Group and our professional team are at the forefront of Cayman director services and able to meet our clients economic substance requirements from experienced board members able to act on the boards of all entities in scope of the economic substance requirements to office facilities and assistance with the requirements on the ground,” says David Lloyd, Managing Director of Bell Rock Group.
Bell Rock Group
Bell Rock Group is a leading provider of Cayman director services, fund services and corporate services based in the Cayman Islands. Our experienced team members each have over 20 years of senior industry experience having worked for household names in Europe, North America and Asia. We assist clients in all major financial regions and with many of the leading financial institutions and corporations in the industry. Bell Rock Group is regulated by the Cayman Islands Monetary Authority.