New Economic Substance Requirements in the Cayman Islands
In common with numerous other international financial centres, the Cayman Islands has passed legislation to introduce new substance requirements for certain Cayman Islands entities. Cayman Islands entities that are in-scope of the legislation and carrying on particular activities will now have to demonstrate economic substance in the Cayman Islands.
Responsibility for compliance with these new requirements rests with the directors of companies and the general partners of limited liability partnerships. The penalities for non-compliance are significant.
We have provided a summary of the requirements in our memo on the new laws. We anticipate that the regulations for the implementation of these new requirements will evolve over the coming months. We will provide further updates as new information becomes available.
All companies and limited liability partnerships that fall within the scope of the new laws should start to evaluate whether or not they are tax resident in the Cayman Islands (or elsewhere) and whether they are engaged in any relevant activity to determine what measures, if any, they might need to take in order to achieve compliance.
If you have questions in relation to the new substance requirements, or require assistance, please contact your usual Trident Trust representative or Louise MacDougall in our Cayman office.
Download our memo for a detailed briefing on the new laws.