The Economic Substance (Companies and Limited Partnerships) Act, 2018 came into force on 1 January 2019 requiring British Virgin Islands companies and limited partnerships that are tax resident and carrying out ‘Relevant Activities’ to demonstrate economic substance. The new legislation, which applies to existing and new BVI entities, was introduced to address the concerns of the EU Code of Conduct Group and the OECD Forum on Harmful Tax Practices regarding economic substance.
This summary replaces our original release of 11 January 2019 and updates from 31 May 2019 and 16 July 2019 (respectively) to provide a consolidated overview of the key aspects of the legislation and guidance.Discover More
BVI ITA issues final Economic Substance Rules – The ITA has now published the final version of the Code which has been renamed Rules (and Explanatory Notes) on Economic Substance (the Rules). The content of the Rules is broadly the same as the draft Code, but it includes a number of amendments following feedback to the BVI Government from industry stakeholders and the EU Code of Conduct Group. The amendments also take into account legislative updates to the Beneficial Ownership Secure Search System Act, 2017 (the BOSS Act) which were made to enable use of the BOSS system to accept the economic substance filings by the registered agents.Discover More
On 30 September 2019, the Cayman Islands Data Protection Law (DPL) comes into force, introducing globally recognised standards regarding the protection, processing, and access to, an individual’s personal data.
The DPL applies to ‘data controllers’ established in the Cayman Islands, regardless of whether they have a physical presence in Cayman. Where a data controller engages a third party ‘data processor’ to process personal data on its behalf, the data controller must ensure that the third-party service provider also complies with the DPL.Discover More
Cayman Islands – Legislative changes in the Cayman Islands for Companies, LLCs and LLPs. Following the March 2019 assessment by the Caribbean Financial Action Task Force of the Cayman Islands’ anti-money laundering and counter-financing of terrorism regime, recent legislative amendments have come into force in the Cayman Islands.
The amendments introduce new requirements on how certain information is required to be maintained, filed and disclosed relating to the different entities. For the purpose of this update, we focus on the amendments as they relate specifically to Cayman Islands companies.Discover More
Bermuda entities that are tax resident in another jurisdiction may now seek an exemption from economic substance requirements. On Friday, 28 June 2019 Bermuda adopted the Economic Substance Amendment Act 2019, which creates an exemption for entities registered in Bermuda that are tax resident in an acceptable jurisdiction. The amendment brings Bermuda’s economic substance legislation in line with other jurisdictions, including the BVI and the Cayman Islands, whose economic substance legislation already includes this exemption.Discover More
Following the recently enacted Anti-Money Laundering (Amendment) Regulations, 2019, the Cayman Islands Monetary Authority (CIMA) now has enhanced regulatory powers to obtain information from the person or entity carrying out relevant financial business, a person connected to the relevant financial business, or a person reasonably believed to have relevant information. Entities registered with CIMA as Excluded Persons under the Securities Investment Business Law (Revised), such as investment managers and investment advisers incorporated in the Cayman Islands, are affected by these regulatory changes in particular and should note the new requirements.Discover More
This summary replaces our previous releases of 21 December 2018 and 11 March 2019 and provides an updated overview of the key aspects of the legislation by outlining steps to identify which Cayman entities are in scope and how to achieve compliance.Discover More
In response to increasing pressure from the EU and the OECD, and to avoid being placed on the EU Council’s list of non-cooperative jurisdictions for tax purposes, each of Bermuda, BVI and Cayman have introduced economic substance legislation (ES Legislation) effective 1 January 2019 to satisfy such requirements.
The ES Legislation varies slightly by jurisdiction based on differences between each jurisdiction’s economies, legal framework and understanding and interpretation of the EU and OECD’s expectations. Marbury has prepared a brief comparison and overview relating to the similarities and differences in respect of each of Bermuda, BVI and Cayman Islands for your reference.Discover More
A range of relief measures were outlined to help local enterprises deal with the fallout and uncertainty of the global economic and trade environment. As part of these measures it is proposed that the business registration (BR) fees for the period 1 April 2019 to 31 March 2020 will be waived, and only the BR Levy will be charged.Discover More
Most Hong Kong managers manage offshore funds that are formed and regulated (or exempt from regulation) in the Cayman Islands or other similar locations. For some time now the Government of the Hong Kong Special Administrative Region has grappled with how to create greater certainty for investors as to the tax neutrality of these structures in order to bolster the asset management industry in Hong Kong.Discover More
Bermuda has tabled a bill to implement legislative changes addressing concerns raised by the EU Code of Conduct Group regarding economic substance by 31 December 2018. On 7 December 2018, legislation was tabled in the House of Assembly proposing economic substance requirements on certain Bermuda companies and limited liability companies.Discover More
Segregated Portfolio Company or Protected Cell legislation exists in the laws of several countries. The most commonly used jurisdictions are the Cayman Islands, British Virgin Islands and Bermuda (all of which are offered within the Marbury group). This memo deals specifically with the Cayman Islands, although concepts are mostly valid across all three jurisdictions.Discover More
The Bermuda Government has extended the transitional deadline from 24 September 2018 to 15 December 2018 regarding Bermuda’s introduction of beneficial ownership registers.Discover More
The Cayman Islands Monetary Authority (CIMA) issued a notice on 24 September 2018 extending certain deadlines regarding the appointment and notification of Anti-Money Laundering Compliance Officers (AMLCOs), Money Laundering Reporting Officers (MLROs) and Deputy Money Laundering Reporting Officers (DMLROs).Discover More
FUNDS, PRIVATE EQUITY AND INVESTMENT VEHICLES
Cayman Islands entities conducting relevant financial business are reminded they must appoint individuals as their AML Officers by 30 September 2018 under the AML Regulations (2018 Revision).
Singapore These legislative changes to the Companies (Amendment) 2017 aimed at reducing the regulatory burden for companies will take effect from 31 August 2018: Alignment with timelines for holding Annual General Meetings (AGMs) and filing Annual Returns (ARs) to the Financial Year-End (FYE) Exemption for private companies from holding AGMs subject to…Discover More
Under the Cayman Islands beneficial ownership legislation and regulations, certain Cayman Islands companies are required to maintain details of each qualifying beneficial owner in a beneficial ownership register.
Each company that falls within the scope of the legislation is required to complete and maintain a register at its Cayman Islands registered office with a licensed corporate services provider.Discover More
Moving a business from one country to another could help alleviate overly onerous operational requirements under the current companies’ laws, reflect the changing nature of the business, offer administrative simplification for a business, or deal with unexpected regulatory or tax consequences arising from changes in law or the growth of the business.Discover More
Singapore From 20 April 2018, directors of a company can voluntarily revise their defective financial statements without the need to obtain a court order. This will enable directors of a company to revise the financial statements of the company that do not comply with the requirements of the Companies Act (including compliance…Discover More
CAYMAN ISLANDS FUNDS, PRIVATE EQUITY AND INVESTMENT VEHICLES – Late last year the Cayman Islands Monetary Authority (CIMA) issued updated Guidance Notes under the Anti-Money Laundering Regulations, 2017 which have just come into force. Marbury has been awaiting clarification on some parts of the updated Guidance Notes after feedback was provided from the industry…Discover More
The Companies Ordinance (Cap.622) has been amended to require a company incorporated in Hong Kong to identify persons who have significant control over the company and to maintain a register of significant controllers to be accessible by law enforcement officers upon demand. This follows similar steps taken in the UK and other jurisdictions, and the Hong Kong RSCs will not be accessible to the general public.Discover More
The Hong Kong government has now introduced amended legislation that regulates the provision of, until now, unregulated company services by accounting professionals, estate agents, legal professionals and trust and company service providers. The move is consistent with the government’s commitment to adopt common reporting standards, institute a register for persons with significant control and generally to the extension of enhanced client due diligence and record-keeping regarding private Hong Kong companies.Discover More
The use of British Virgin Islands, Hong Kong and Singapore The British Virgin Islands, Hong Kong and Singapore provide attractive product offerings broadly characterised by cost effective incorporation and ongoing maintenance fees, a tax neutral investment platform, corporate flexibility, an English common law system that underpins the rule of law and contractual…Discover More
Hong Kong Chief Executive, Carrie Lam, delivered her first policy address to the Legislative Council last week on 11 October, outlining the Government’s future policy initiatives. Among these were two key tax-related measures to maintain Hong Kong’s position as a leading business hub in Asia.Discover More
We are hearing first-hand from colleagues and friends across the financial sector that the devastation in the British Virgin Islands, including loss of life and property, is even worse than was ever feared possible. Whilst international aid agencies and the UK Government are assisting the BVI to restore the basic infrastructure and evacuate those requiring urgent medical assistance, it will be a long time until normal daily life resumes.
Marbury has selected a charity working on the ground in the BVI through which 100% of all donations received will go directly to helping support local BVI communities. Marbury has set-up a matching scheme for clients interested to donate with us.Discover More
The BVI Government has passed two Orders for the increase of fees and penalties applicable to BVI Business Companies. The new fees in the BVI Business Companies Act (Amendment of Schedules) Orders will apply to most Registry transactions for BVI Business Companies and will come into effect on 1 January 2018.
View the key changes related to the Amendment Schedules by clicking below.Discover More
Recent changes to UK tax legislation have led to questions being raised as to whether non-UK residents should always choose to acquire commercial property in non-UK resident vehicles. It used to be the case that if you were a non-UK resident acquiring UK commercial property, it was generally better to structure the acquisition of such property so it was owned by a company in a non-UK, tax neutral jurisdiction. However, a number of recent developments have meant that this may no longer always be a sensible choice, particularly if there is a plan to develop land and sell it soon afterwards.
For more information please view the full guest article by clicking below.Discover More
The Government of the British Virgin Islands has announced that the 2017 deadlines for notification and reporting obligations under the Common Reporting Standard (CRS) will be extended by two months.
Financial Institutions (FIs) will now have until 30 June 2017 to register with the BVI International Tax Authority (ITA) on the ITA’s reporting portal, the BVI Financial Account Reporting System (BVI FARS), without the ITA considering compliance measures or penalties.Discover More
Small businesses tend to gravitate to the BVI as the choice of jurisdiction for incorporation due to its ease and cost-effectiveness. However, very often such companies will be established with a sole individual director who is also the sole shareholder of the company. Problems arise if this individual then passes away, regardless of whether the individual had a will or not.Discover More
Singapore Key legislative amendments taking effect from 31 March 2017 The recent amendments to the Companies Act and the Limited Liability Partnerships Act, new requirements will be introduced which will affect companies and limited liability partnerships (LLPs). (a) Maintain non-public register of controllers and register of nominee directors To make the beneficial ownership…Discover More
As foreshadowed in our Memo of 15 April 2016, the Cayman Islands will follow the BVI and other jurisdictions by adopting a beneficial ownership register system. The Cayman Islands government has now published draft legislation following public consultation, which took place during the course of last year. The proposed system…Discover More
At Marbury, we are commonly asked by clients for advice on the steps and procedure for calling a general meeting of a Hong Kong company. In this briefing, we explain the steps involved and the requirements for calling a meeting. This overview is not an exhaustive checklist as the Ordinance…Discover More
The advantages offered by the use of BVI companies and the positive impact of these on deal costs, and the expense and ease of ongoing maintenance and governance. British Virgin Islands (BVI) companies provide cost-effective solutions for investment and cross border transactions. In the vast majority of cases they…Discover More
As we have previously advised, the British Virgin Islands (BVI) is now implementing anti-money laundering policies passed late last year regarding ultimate beneficial ownership (UBO). The changes add to the jurisdiction’s reputation with the international community and we are hopeful they will result in benefits such as easing the process…Discover More
Mauritius The Double Taxation Avoidance Agreement (DTAA) with Mauritius has been amended. The new protocol gives India the right to tax capital gains arising from the sale or transfer of shares of an Indian company acquired by a Mauritian tax resident. Investments made before 1 April 2017 are exempt and shares acquired…Discover More
The use of LLCs in the Cayman Islands will be of particular interest to asset managers seeking to establish fund structures. The flexibility of an LLC means that it is also ideal for purposes such as joint ventures, holding companies, and serving as the general partner to an exempted limited partnership. They can also be useful property holding vehicles.Discover More
British Virgin Islands This briefing examines the key aspects of distributions, share purchases and redemptions under the BVI Business Companies Act 2004 (the Act). Distributions A company’s articles of association will contain provisions dealing with the payment of distributions. The Act imposes additional obligations relating to the payment of distributions. What is…Discover More
The BVI Government has agreed to establish and maintain an electronic platform that will allow “the automatic right to unrestricted and timely” access for law enforcement agencies in the UK to accurate and current beneficial ownership information on corporate and legal entities incorporated in the BVI by the end of June 2017.Discover More
The Bermuda Government has recently amended its company law affecting all companies both local and exempted. The amended Companies Act 1981 now requires a Register of Directors in respect of Bermuda registered companies to be kept by the Registrar of Companies. Every company registered in Bermuda will be required to file at the Registrar a list of its directors and their addresses.Discover More
The Cayman Islands will set up a central platform of beneficial owners that will allow designated Cayman Islands officials to directly obtain details of beneficial ownership of companies incorporated in Cayman. Upon formal request, this information will be shared with law enforcement authorities in the UK. Commitment has been given to have the system in place by June 2017.Discover More
United Kingdom – A director of a company incorporated in the United Kingdom, has been disqualified from acting as a director for 5 years for breaching his duty to act in the best interests of the company by causing or allowing payments totalling £314,588 to be made to third parties.Discover More
British Virgin Islands – The BVI Business Companies (Amendment) Act, 2015 (the Amendment Act), which includes new requirements for the filing of director information with the Registry of Corporate Affairs was published on 31 December 2015, and came into force on 15 January 2016. Sections 27 and 28 of the Amendment Act in relation to the provisions/filing of the Register of Directors will come into force on 1 April 2016.Discover More
Hong Kong Asset managers may soon have an alternative to unit trusts if they wish to set up open-ended investment funds in Hong Kong. Legislators are reviewing rules that would allow open-ended fund companies to operate in Hong Kong for the first time. Unlike regular companies, these entities are able to vary…Discover More
British Virgin Islands FSC has confirmed that it will delay implementation of the Common Reporting Standard (CRS) in the BVI.
On the 1st of January 2016 legislation to implement the CRS rules came into effect. The BVI tax authority has now clarified that Financial Institutions will be required to notify that they will have reporting obligations for the 2016 reporting year by 30 April 2017, …Discover More
Appointments and Notification of Changes to Directors – The Companies (Amendment) Law 2015 has now come into effect in the Cayman Islands and will have potential application to all Cayman Islands companies. The Law deals with appointments and notification of changes to directors.Discover More
14 December 2015 will see Hong Kong finally catch up with other free market economies when the much delayed Competition Ordinance comes into operation.
Your New Year’s resolution should be made a little earlier than normal, to ensure that 2016 doesn’t bring you some unfortunate surprises with the monkey of the Competition Commission on your back.Discover More
The Securities and Investment Business (Incubator and Approved Funds) Regulations, 2015 which came into force in the British Virgin Islands on 1 June 2015, creates two new, lightly regulated open-ended funds products – the Incubator Fund and Approved Fund. These dynamic new fund products complement the existing offering of Private Funds, Professional Funds, and Public Funds in the BVI. Incubator and Approved Funds are not required to obtain a licence, or be recognised or registered under the Securities and Investment Business Act, 2010, and will not be subject to the Regulatory Code, 2009.Discover More