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 TestA 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:
- taking decisions on the holding and selling of investments;
- calculating risk and reserves;
- taking decisions on currency or interest fluctuations and hedging positions; or
- preparing reports or returns, or both, to investors or the Cayman Islands Monetary Authority, or both.
be directed and managed in an appropriate manner in the Cayman Islands which will require, among other things:
- the board of directors, as a whole, to have the appropriate knowledge and expertise to discharge its duties as a board of directors;
- meetings of the board of directors to be held in the Cayman Islands at adequate frequencies given the level of decision-making required;
- the minutes of all meetings of the board of directors and appropriate records of the relevant entity to be kept in the Cayman Islands.
having regard to the level of relevant income derived from the relevant activity carried out in the Cayman Islands
- have adequate operating expenditure incurred in the Cayman Islands;
- have adequate physical presence (including maintaining a place of business or plant, property and equipment) in the Cayman Islands; and
- have an adequate number of full-time employees or other personnel with appropriate qualifications 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 GroupBell 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.Contact:David Lloyd
Bell Rock Group
1 345 949 4850
For the original news story, please visit https://prdistribution.com/news/cayman-islands-economic-substance-cayman-directors-professional-services.html.
Jason Marlaux is a reporter for Desert Sentinel. After graduating from Central University of Nevada, Reno, Jason got an internship at NPR and worked as a reporter and sound engineer. Jason has also worked as a reporter for VICE. Jason covers entertainment and community events for Desert Sentinel.