Cayman Islands announce business continuity measures (UPDATED)
In response to the COVID-19 global pandemic, the Cayman Islands Government has announced a number of measures to support the continuity, viability, and strength of the financial services industry and ensure business continuity to clients.
The measures have been announced through industry advisory notices and those of most interest to our clients are noted below, as and when they are announced.
Last updated: 7 May 2020
De-registrations: CIMA has confirmed that it will accept uncertified resolutions confirming the de-registration / cancellation date of a fund.
Fund Annual Return (FAR): The Mutual Funds (Annual Returns) (Amendment) Regulations (2020) are now in force and amend the FAR form required to be submitted to CIMA by registered mutual funds. CIMA has, however, indicated that all mutual funds with a 31 December 2019 financial year end can submit the current form.
Extended Filing Dates: CIMA has allowed a one month extension for filing deadlines for some regulatory returns with due dates through 30 June 2020. Those extensions of most interest to our clients relate to Regulated Funds and Securities Investment Business institutions, with the full list of of filing extensions here (PDF).
Extension for notification of certain changes to the Registrar of Companies
On 27 April, the Registrar of Companies (the ROC) advised that the notification deadline in respect of certain changes has been further extended (from 30 April) to 31 May 2020. This extension relates to any changes occurring on or after 1 March 2020 to:
- Directors and other officers of companies and managers of limited liability companies
- Registered office address
- Memorandum and articles of association; and
- Increases in share capital
Notably, while the previous extensions to 30 April 2020 (as noted in an earlier update (PDF)) also captured reductions in share capital, this has not been included in the most recent measures.
Acceptance of e-certifications by the ROC
The ROC has advised that they will accept affidavits or other documents that have been notarised/certified online or utilising audio-video technology for the time being.
Beneficial ownership filings extension
Corporate services providers now have until 15 May 2020 in respect of the requirement to make beneficial ownership submissions following the recent change to the threshold to qualify as a registrable beneficial owner. This extension does not impact the underlying obligations of Cayman Islands companies and limited liability companies with respect to the Cayman Islands beneficial ownership regime.
Annual fee deferral & extension to annual return filing deadline
As of 26 March, the Cayman Islands Government has deferred the obligation to pay annual fees until 30 June for corporate entities registered in the Cayman Islands. This fees deferral applies to all companies, including limited liability companies, foundation companies and also exempted liability partnerships (ELPs).
The annual return filing deadline for all companies has also been extended until 30 June. Companies and ELPs that fail to file their annual returns and/or pay their annual fees by the 30 June deadline will be subject to penalties as of 1 July 2020.
Unfortunately for those that have diligently settled their government fees this announcement comes a little too late.
Economic Substance obligations
Extension for Economic Substance Notification (ESN) filings
As a result of the annual return extension for companies, the deadline for ESN filings is now 30 June. Note, that the ESN submission will remain a prerequisite for companies successfully filing an annual return.
Economic Substance continuing obligations
The Department for International Tax Cooperation (DITC) has not yet made any changes to the reporting deadline under The International Tax Co-operation (Economic Substance) Law (Revised) (the ES Law) with reports for the financial year ending 31 December 2019 still therefore due by 31 December 2020.
Relevant entities are also still required to operate core income generating activities (CIGA) in Cayman with regards to the relevant activities.
However, the DITC has recognised that COVID-19 may impact planned travel during 2020 and therefore may not have been able to hold board meetings in the Cayman Islands to fulfil the ‘directed and managed’ requirements under the ES Law. The industry advisory notes that the DITC will consider the fact that board meetings may have been required to be held virtually on a case-by-case basis when determining whether an entity has passed or failed the ES Test.
CRS and FATCA reporting deadlines extended
The new Cayman Islands DITC Portal for CRS FATCA reporting will now launch in June 2020 and all functionality will be available at that time.
As a result of this change by the US competent authority, the DITC is now extending the FATCA reporting deadline for the 2019 reporting period to 16 November 2020.
Due to applicable international deadlines being extended and in order to bring the reporting deadlines in line, the DITC is now extending the CRS reporting deadline for the 2020 reporting period to 16 November 2020 as well.
The above changes have been implemented to lessen some of the administrative challenges in the current climate and are subject to change in the future. We will continue to monitor the situation and update our clients as appropriate. Most importantly, we hope that you and your loved ones stay safe and healthy during this challenging time and thank you for your continued support.
Should you have any queries about any information in this update please contact your usual Marbury advisor or firstname.lastname@example.org.
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