Termination of Cayman vehicles and CIMA director registration renewals and cancellations

As the end of the calendar year approaches, if you have any Cayman vehicles that you are considering terminating, there are several steps to be taken before the end of the calendar year to minimise 2023 annual fees.

For funds regulated by Cayman Islands Monetary Authority (CIMA), the timing of de-registration submissions of the regulatory policy has been amended, leading to the change of procedures for terminating funds.

Hong Kong Companies Ordinance (CAP622) & Personal Data – New Inspection Regime

Arising out of social issues affecting office bearers in Hong Kong, the Hong Kong government determined in 2020 that company directors’ (and secretaries) sensitive personal information should be private.  The Companies Ordinance (CAP622) (CO), has been amended accordingly.  Under the amended CO, company directors’ and secretaries’ personal data will continue to be stored in the Companies Register Information System, under the control of the Companies Registry.  However, only a few authorised persons will have access to this previously public information.

Updated De-registration rules for Cayman Islands Regulated Funds

With effect from 17 August 2022 With the aim of streamlining the process for de-registering mutual funds and private funds, the Cayman Islands Monetary Authority (CIMA) has recently announced a list of updated Rules and Regulatory Procedures (the Rules) on the Cancellation of Licences or Certificates of Registration for Regulated Mutual Funds and Registered Private Funds. CIMA have confirmed that all de-registration applications made on or after 17 August 2022 will follow the new Rules. CIMA made clear that any funds that have submitted applications under the old procedures prior to 17 August 2022 will still be able to take advantage of the fee concessions under the old rules. Under the updated Rules, the “Licence under Termination” (LUT) and “Licence under Liquidation” (LUL) options have been eliminated and regulated funds must file all applicable deregistration documents in a single bundle. Regulated funds will remain fully registered with CIMA and liable to pay full annual fees until the complete deregistration application has been submitted following the final distribution to investors and the completion of the final audit. Regulated funds must have paid all prescribed fees and submitted all required audited financial statements and must not have any outstanding queries or regulatory filings with CIMA. Corresponding to the old rules, regulated funds must notify CIMA when the funds intend to cease carrying on business or have ceased carrying on business as a regulated funds pursuant to the Mutual Funds Act or the Private Funds Act within 21 days of the date the funds cease to carry on business. The content of the deregistration requirements does not have significant changes under the updated Rules.

Cayman Islands Voluntary Liquidations

If you have a Cayman company which you no longer require and would like to dissolve before 31 December 2022 in order to avoid paying the annual fees next year, on the basis that the company is not a regulated entity and is solvent, the voluntary liquidation process should commence by 31 August 2022. We strongly recommend clients to start the liquidation process earlier, especially for clients holding entities with complex structures. This is to ensure full dissolution by the end of the calendar year. This helps companies avoid additional regulatory costs and reduce administrative burdens. Voluntary liquidation process The voluntary liquidation procedures of a company would follow the below procedure: Determine if the company is suitable using the solvency test Declarations of Solvency signed by all directors Shareholders pass a Special Resolution, which must: Resolve to wind up the company; Appoint voluntary liquidator(s); Approve the liquidators fee; and Provide for an indemnity to the liquidators Notice and Liquidators consent, filed with the Registrar of Companies (Registrar) and a notice that the shareholders have resolved to liquidate the company Publish the First Gazette Notice Publication of Notice in other jurisdictions Publish the Second Gazette Notice Pay any creditors claims Pay final dividend Final meeting held and notice to Registrar The following types of companies may find a 2022 dissolution date beneficial: Companies that are reporting as Financial Institutions under FATCA or CRS Relevant Entities undertaking Relevant Activities under the Economic Substance Act Benefits of voluntary liquidation Why should you consider to voluntarily liquidate a Cayman entity which you no longer require? Voluntary liquidation can efficiently close down a company while avoiding court processes and legal action. Additionally, it offers protection

Seychelles: Additional Register of Directors requirements

To ensure that international regulatory standards of tax transparency are met, the Seychelles Government enacted a suite of new legislation over the last two years, including the International Business Companies (Amendment) Act 2021 (the Amendment Act) and the International Business Companies Act and Other Related Laws (Amendment) Act 2021. The legislation imposes a number of new reporting obligations on Seychelles companies (and their Registered Agents), and the Financial Services Authority recently issued the International Business Companies Guidelines to aid compliance. Under the Amendment Act additional mandatory fields relating to the Register of Directors (RODs) are required to be completed, along with an additional requirement to provide consent in writing by the persons/entities appointed. An overview of the RODs including the new requirements is set out below. Register of Directors (ROD) mandatory fields The following information relating to company directors are required to be filed with the Registrar as mandatory fields in the ROD: For individual directors name date of birth nationality service address for receipt of documents and residential address (if different to service address) For corporate directors date of incorporation place of incorporation service address for receipt of documents (ie registered office address) Dates relating to each person entered as a director, alternate director, or nominated as reserve director Appointment/Nomination date Cessation date Written consent to act as director Under the Amendment Act, every person appointed as a director or alternate director or nominated as a reserve director of a company from 6 August 2021 onwards must provide consent in writing. For persons appointed or nominated prior to 6 August 2021, this requirement is not applicable. Filing deadlines Whilst a company is not required to appoint a director within