The Stamp Duty (Amendment) Law, 2018 (‘Law’) came into effect on 19 December 2018 introducing Stamp Duty on ‘Linked Property Transactions’ from 31 December 2019. For more information on what constitutes a linked property transaction, please see our briefing entitled Welcome delay in change to Cayman Islands Stamp Duty law gives developers another year before Stamp Duty increase.

In a significant alteration to draft legislation, the Cayman Islands Stamp Duty (Amendment) Law 2018 (‘Law') allows developers with planning permission in place by 30 June 2019 to have a year to take advantage of the pre-existing regime for stamp duty on ‘linked property transactions’, provided they enter into their contracts before 31 December 2019.

UPDATE: For the current position on stamp duty and linked property transactions see our piece: What is the new stamp duty position on linked transactions?

The Cayman Islands (‘Cayman’) Legislative Assembly is scheduled to debate The International Tax Co-operation (Economic Substance) Bill (‘Bill’), 2018 in December 2018. The Bill proposes “a law to provide for an economic substance test to be satisfied by certain entities; and for incidental and connected purposes” and is expected to be passed into Law and ready to take effect by 1 January 2019. Guidelines are expected to be published early in 2019.
What is economic substance?
To meet the ‘Economic substance’ requirement, a Cayman company or other entity must be carrying out substantial business activity which is related to the line of business that the entity conducts in Cayman.

NOTE - Definitions used in this piece have been updated. For more information please refer to links in our piece Cayman issues Industry Advisory on Economic Substance Regulations and Guidance v2.0.

The Cayman Islands Monetary Authority (‘CIMA’) has published amendments (‘Amendments’) to its December 2017 Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands. The following is a brief overview of the principal changes.

Legal 500 has released its 2019 Caribbean Guide, and partners Laura Hatfield and Ian Jamieson have been named as leading individuals. 

Solomon Harris merged with Bedell Cristin earlier in the year, and the firm has achieved rankings in five of the Cayman categories: Real Estate, Insurance/Reinsurance, Dispute Resolution, Corporate and Commercial and Investment Funds.

In time to help fund Anti-Money Laundering (‘AML’) Officers meet the 31 December 2018 deadline for regulated funds to notify the Cayman Islands Monetary Authority (‘CIMA’) of their appointment of AML Officers, CIMA has published answers to Frequently Asked Questions (‘FAQs’) on matters relating to forms (‘MLO-154-99’) which need to be completed on CIMA’s Regulatory Enhanced Electronic Forms Submission (‘REEFS’) Portal. The forms relate to all AML Officers which are: Money Laundering Reporting Officer (‘MLRO’), Deputy Money Laundering Reporting Officer (‘DMLRO’) and the Anti-Money Laundering Compliance Officer (‘AMLCO’).

The Cayman Islands Monetary Authority (‘CIMA’) has published its 2018 Edition of its Regulatory Handbook and its Appendices, as well as the latest editions of and amendments to guidance notes and Rules.

New Regulatory Handbook

Published in the Cayman Islands Gazette on 3 December 2018 is the new November 2018 edition of the Regulatory Handbook Volume 1 which replaces the August 2017 version.  The Regulatory Handbook – Appendices 1 replaces the February 2017 version.  CIMA’s Regulatory Handbook sets out the policies and procedures CIMA, its committees and officers must follow in performing CIMA’s regulatory and co-operative function and gives specific information on matters such as CIMA’s approach to supervision, supervisory returns and AML procedures. 

At a business briefing on 14 November 2018, representatives of the Cayman Islands Government (‘CIG’) stated that the Cayman Islands (‘Cayman’) Data Protection Law 2018 would not come in to force in January 2019, as previously advised, but would be delayed until September 2019. This is confirmed on the Cayman Ombudsman website.

The Cayman Islands (‘Cayman’) Government (‘CIG’) has issued an Industry Advisory that the Organisation for Economic Co-operation and Development (‘OECD’) has confirmed that it had extended the ‘substantial activities’ requirement to ‘no or only nominal tax’ jurisdictions in its Base Erosion and Profit Shifting (‘BEPS’) Inclusive Framework (‘Framework’). The move is to prevent business activity avoiding the Substantial Activities Requirements which apply to all preferential regimes for geographically mobile income by relocating to a zero-tax jurisdiction. (Consult the new global standard on substantial activities in no or only nominal tax jurisdictions at www.oecd.org/tax/beps/resumption-of-application-of-substantial-activities-factors.pdf .)

NOTE - Definitions used in this piece have been updated. For more information please refer to links in our piece Cayman issues Industry Advisory on Economic Substance Regulations and Guidance v2.0.

The Cayman Islands Government has good news for those Caymanians looking to buy their first homes in the Cayman Islands. The changes to stamp duty in The Stamp Duty (Amendment) Bill 2018 (‘Bill’) propose significant increases in the thresholds for stamp duty concessions to help ease the financial burden on first-time Caymanian property buyers.

If the Bill is passed without amendment, Caymanians will be able to take advantage of these new concessions from 1 January 2019. 

UPDATE: When the Bill became The Stamp Duty (Amendment) Law, 2018, there was a significant alteration in wording which allows developers with planning permission in place by 30 June 2019 to have a year to take advantage of the pre-existing regime for stamp duty on ‘linked property transactions’, provided they enter into their contracts before 31 December 2019. For more information, please see our piece Welcome delay in change to Cayman Islands Stamp Duty law gives developers another year before Stamp Duty increase. For the current position on stamp duty and linked property transactions see our piece: What is the new stamp duty position on linked transactions?

Those looking to benefit from the favourable stamp duty treatment facilitated by developers who offer property in the Cayman Islands as part of a land purchase and development contract package will need to act quickly if they want to beat the changes proposed in The Stamp Duty (Amendment) Bill 2018 (‘Bill’). To take advantage of the current arrangements you will need to enter into these contracts by no later than 31 December 2018. Developers who have previously sought to utilise the current law as part of their offering to potential buyers will also need to take note of the proposed changes.

UPDATE: When the Bill became The Stamp Duty (Amendment) Law, 2018, there was a significant alteration in wording which allows developers with planning permission in place by 30 June 2019 to have a year to take advantage of the pre-existing regime for stamp duty on ‘linked property transactions’, provided they enter into their contracts before 31 December 2019. For more information, including what constitutes a linked property transaction, please see our piece Welcome delay in change to Cayman Islands Stamp Duty law gives developers another year before Stamp Duty increase. For the current position on stamp duty and linked property transactions see our piece: What is the new stamp duty position on linked transactions?

On 19 October the Financial Action Task Force (‘FATF’) published its revised Recommendations for international standards on combating money laundering and the financing of terrorism and proliferation. The revision amends FATF's Recommendation on New Technologies (Regulation 15) and adds two new definitions to the Glossary: ‘Virtual Assets’ and ‘Virtual Asset Service Provider’. FATF’s definition of 'Virtual Assets' in the standard covers virtual currencies, but also extends to cover the fact that anything can be tokenized as an asset and transferred on a blockchain or other digital peer to peer format. The standard also covers virtual asset service providers, i.e. a crypto currency exchange.

At the beginning of October 2018 the European Securities Management Authority (‘ESMA’) published several new Question and Answer (‘Q&A’) documents which will be of interest to those in the funds industry.

The Cayman Islands Court of Appeal (‘CICA’) has allowed a Cayman Islands (‘Cayman’) mutual fund to bring claims in the New York courts for gross negligence and fraud against three entities (‘the Affiliates’) affiliated with Argyle’s Cayman auditors (‘BDO’). This was despite express contractual terms of engagement of BDO restricting dispute resolution to mediation or arbitration and a clause giving Cayman courts exclusive jurisdiction.

The Cayman Islands Monetary Authority (‘CIMA’) has published a new Regulatory Policy - Licensing Mutual Fund Administrators (‘the Policy’) which sets out the criteria CIMA will apply in licensing mutual fund administrators.
When does the Policy apply?
The Policy states that CIMA must give prior approval to anyone wanting to conduct Mutual Fund Administration (‘MFA’) in or from within the Cayman Islands (‘Cayman’). The Policy sets out how CIMA will assess those who apply to do so, although it will also apply: the Mutual Fund Administrators Licence (Applications) Regulations 2001 (the ‘Regulations’); the Anti-Money Laundering Regulations (2017 Revision) (‘AML Regulations’); the Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands (the ‘AML Guidance Notes’); and any other law, policy or statement of guidance which is relevant to the application.

Before the new Cayman Islands (‘Cayman’) Beneficial Ownership Register (‘BOR’) went live, the Cayman Islands Government (‘CIG’) completed a security enhancement and had the air-gapped platform independently evaluated to check for any deficiencies. The result was circulated in an Industry Advisory dated 9 October 2018, confirming that the non-public beneficial ownership platform (‘BOP’) was assessed as secure, with no deficiencies in the air-gapped system.

In a notification dated 24 September 2018 the Cayman Islands Monetary Authority (‘CIMA’) has extended the deadline set for regulated funds to notify it of the appointment of Anti-Money Laundering Officers (‘AML Officers’) from 30 September 2018 to 31 December 2018. This extension applies to the notification requirement only and regulated funds must still appoint their AML Officers by 30 September 2018.

In a hearing of four Preliminary Issues in the Cayman Islands (‘Cayman’) Grand Court (‘Court’) it was decided that a former director of Tangerine Asset Management Ltd (‘TAM’) was able to rely on indemnity provisions in TAM’s Articles of Association (‘Articles’). The terms of indemnity also covered her legal costs in defending the current claim, brought by an assignee of the rights of TAM, that the director breached her common law duties and/or her fiduciary duties to the company, which is now in liquidation. Here we look at the lessons for directors on the ability to rely on indemnities in the Articles of the company to which they are appointed. In a later piece we will consider the Court’s finding that she did not have to wait until the end of the case to have her legal fees paid but was entitled to have them paid as they were incurred.

The England and Wales Court of Appeal (‘EWCA’) has decided that litigation privilege (‘LP’) does protect documents prepared by attorneys in anticipation of an investigation by a regulator (in particular interviews between attorneys and the company’s employees). It also considered the application of legal advice privilege (‘LAP’) to interviews with ex-employees and considered the earlier decision in ‘Three Rivers No. 5’ and whether that decision should be reviewed by the Supreme Court. The decision of the EWCA would be persuasive authority in the Cayman Islands (‘Cayman’).

In the Cayman Islands (‘Cayman’) under section 107 of the Companies Law (2018 Revision) (‘Companies Law’) an Official Liquidator (‘OL’) may be removed from office by order of the Grand Court (‘Court’) made on the application of a creditor or shareholder of the company.

JOIN OUR MAILING LIST

From time to time our firm hosts or sponsors events of interest to our clients. Please join our mailing list if you would like to be notified of upcoming events.

  • Lawyers World Global Awards Solomon Harris
  • World Finance Awards 2012 Solomon Harris
  • IFLR 1000 2011 Recommended Firm
  • 2011 Acquisition Legal Awards
  • ACQ Law Awards 2011 Solomon Harris
  • Corporate Intl Awards Law Firm of the Year Cayman Islands
  • Deal Makers Global Awards
  • Finance Monthly Global Awards 2012 Solomon Harris
  • Solomon Harris wins IFLR Asia Awards
  • Lawyer Monthly
  • The Lawyer Top 30 Offshore
  • Captive Review's Offshore Firm of the Year award
  • IFLR 1000 2014 Recommended Firm

Solomon Harris is a member of AIMA

Cayman Trusts (Amendment) Law 2019 in force from 14th June 2019...

The new Cayman Islands ('Cayman') Trusts (Amendment) Law 2019 (‘Amendment’) will bring...


View All Latest News
  Cayman Islands +1 345 949 0488
  Like Solomon Harris on Facebook Follow Solomon Harris on Twitter +1 Solomon Harris Follow Solomon Harris on LinkedIn Contact Us
Cayman Islands +1 345 949 0488
Like Solomon Harris on Facebook Follow Solomon Harris on Twitter +1 Solomon Harris Follow Solomon Harris on LinkedIn
Contact Us