In world where many documents, photographs, letters and websites or social media accounts for your business only exist in a digital or online format it is worth spending some time to review if and how your executors might access your digital media in the event of your death.
The England and Wales Court of Appeal (‘EWCA’) has considered what needs to be established when a party applies to the court to set aside an earlier judgment which it alleges was based on fraudulent evidence.The decision would be considered persuasive in the Cayman Islands courts.
Case reviewed: Takhar v Gracefield Developments Ltd and others  EWCA (‘Takhar’)
There are two ways a Cayman Islands (‘Cayman’) exempt company’s existence can come to an end. It can be wound up (i.e. liquidated) or it can be struck off the register of companies by the Cayman Companies Registrar. Here we explain why it is better to wind up the company under the Companies Law (2016 Revision) (‘Law’) than to have it struck off and set out the five main steps in the process. If your company is ready to be dissolved, if you start the voluntary winding up process as soon as possible you may be able to complete the necessary steps required before the end of 2017 and save the 2018 annual statutory and registered office fees.
As we reported at the end of December 2016, the Cayman Islands Monetary Authority (‘CIMA’) is continuing to roll out its process for Regulatory Enhanced Electronic Forms Submission (‘REEFS’). Use of the portal will become mandatory where there are online forms available as of 1 October 2017. In other news, the Cayman Islands (‘Cayman’) has (once again) come first in a global survey by The Banker magazine (a part of the internationally recognised Financial Times group).
The England and Wales High Court (‘EWHC’) has considered whether there was a cause of action to allow judgment debtors (‘Marex’) to pursue a claim against the controlling person (‘CSG’) of two British Virgin Islands (‘BVI’) companies (in liquidation) (‘the Companies’) where CSG had allegedly asset-stripped the Companies and dissipated their assets. The issue arose in a challenge by CSG to the jurisdiction of the EWHC. If Marex could not show a basis on which to bring such a claim then CSG’s jurisdictional challenge would succeed. (For the purpose of the hearing the facts were assumed to be as alleged by Marex in their claim.)
The Cayman Islands Department for International Tax Cooperation (‘DITC’) has issued an Industry Advisory to remind users of its portal for the Automatic Exchange of Information for Tax Purposes (‘AEOI Portal’) that the deadline for Foreign Account Tax Compliance Act (‘US FATCA’) and Common Reporting Standard (‘CRS’) reporting is today, 31 August 2017. The AEOI Portal will close at 4pm on 13 September 2017 to prepare the data which has been submitted for transmission. Until it closes the AEOI Portal will accept the submission of late reporting.
A decision of the England and Wales High Court (‘EWHC’) has considered when the legal principle of privilege (‘Privilege’) may be used to protect documents prepared by attorneys in anticipation of an investigation by a regulator (in this case the UK’s Serious Fraud Office (‘SFO’). The principles involved are similar to those covered in our earlier piece (The attorney in the room: privilege and attorney meeting notes) and the application of privilege to the ‘working papers’ of an attorney. Although these are decisions of the EWHC they would be persuasive authority in the Cayman Islands (‘Cayman’).
The Cayman Islands (‘Cayman’) has received the highest assessment standard (‘Compliant’) in seven out of the ten elements making up the international standards governing the exchange of information among tax authorities. In the three remaining categories Cayman was assessed as ‘Largely Compliant’, which is also its overall assessment. Cayman was one of the first ten countries to receive a second-round review, which saw Australia, Canada and Germany also rated as ‘Largely Compliant’.
Long term residence (‘LTR’) certificates allow a holder (and any qualifying dependants) to reside in the Cayman Islands (‘Cayman’) full time. LTR certificates can be beneficial for a host of reasons, including estate and tax planning or simply to allow you and your family to reside in a safe, stable and attractive Caribbean island. If you are looking to acquire LTR in Cayman, you might consider applying under section 37D of the Immigration Law 2015 Revision (the ‘Law’). This section was developed to encourage businesses to come to and thrive in Cayman by providing their key players with an easier path to residency.
The United Kingdom (‘UK’) Privy Council (‘PC’) has confirmed that to appeal orders made by a Court other than at trial (‘interlocutory Orders’) the appealing party must ask for permission (‘Leave’) to appeal from the Court which made the order. Once it has this permission or if it is refused, then the party will be entitled to ask the appeal court to consider the case. The decision relates to proceedings in the Bahamas, but as the applicable law is almost identical to that of the Cayman Islands (‘Cayman’) the decision would be considered highly persuasive authority by the Cayman courts.
The question of when and how a document can be ‘signed’ electronically in the Cayman Islands (‘Cayman’) arises surprisingly often. The Electronic Transactions Law (2003 Revision) (‘the Law’) sets out when and how electronic signatures (‘e-signatures’) can be used and accepted in Cayman.
On 2 August 2017 the Cayman Islands (‘Cayman’) Information Commissioner’s Office (‘ICO’) indicated that the Cayman Government’s Data Protection Law 2017 (‘the Law’) is expected to come into effect in January 2019 (see here). IMPORTANT UPDATE - In November 2018 this was formally put back until September 2019 - see Cayman Data Protection regime will now start in September 2019.
Once that happens the Law will affect any individual or organisation established in Cayman which processes personal data, even where that data is being processed outside Cayman. Although the Law was passed on 17 March and was published in the Cayman Gazette on 5 June 2017 it is not yet in force, allowing those affected time to prepare. Here we look at some of the Law’s provisions (including the corporate finance exemption) and suggest some steps you should consider taking if the Law is likely to affect you or your organisation.
The Privy Council (‘PC’), the ultimate Court of Appeal for the Cayman Islands (‘Cayman’), has confirmed that redemption of shares occurs when a shareholder ceases to be a shareholder, even if they have not yet been paid for the shares they have redeemed. This has determined the interpretation of s.37(7)(a) of the Companies Law (2016 Revision) (the ‘Law’). Although they were not asked to decide the matter as part of their judgment, the PC also commented on where these creditors rank for payment.
The Cayman Islands (‘Cayman’) Department for International Tax Cooperation (‘DITC’) has advised that it has published an updated version of its Common Reporting Standard (‘CRS’) Guidance Notes, version V2.1, which supersedes all previous versions. The advice comes in an Industry Advisory dated 1 August 2017 and in an Update to its AEOI Portal Updates and Industry Advisories page dated 31 July 2017, which also advises AEOI Portal users on making late submissions.
In an Industry Advisory (‘Advisory’) dated 19 July 2017, the Cayman Islands (‘Cayman’) Department for International Tax Cooperation (‘DITC’) has extended the final deadlines for Foreign Account Tax Compliance Act (‘FATCA’) and Common Reporting Standard (‘CRS’) 2017 reporting. The Update to the Automatic Exchange of Information (‘AEOI’) Portal (‘Portal’) News and Update page also refers users to the latest 28 June 2017 version of its AEOI Portal User Guide (V3.2.1) (‘Guide’).
There is no taxation on income, profits or capital gains in the Cayman Islands (‘Cayman’), but for those who want a cast-iron guarantee that their entity will not be subject to those taxes in the future, Cayman also offers an undertaking from the Governor in Cabinet that those taxes will not be imposed on the company for a period of 20 years (extendable by a further 10 years) for most entities and 30 (or 50 on request) for new Limited Liability Companies (‘LLCs’). That undertaking is known as a Tax Exemption Certificate (‘Certificate’), and the turn-around time for an application is about two to three weeks. The Cayman Cabinet Office is currently trialing a new e-service for these applications which should cut that time to two to three days for normal applications, and faster for expedited applications.
In an Industry Advisory dated 23 June 2017, the Cayman Islands (‘Cayman’) Department for International Tax Cooperation (‘DITC’) has advised that before users of its Automatic Exchange of Information (‘AEOI’) Portal (‘Portal’) continue to operate it, they MUST review the latest version of its AEOI Portal User Guide (‘Guide’). The Industry Advisory also advises that the Portal is now back open.
(This updates our earlier piece Cayman AEOI Portal: 2017 Extensions of time for CRS and FATCA and should be read in conjunction with it.)
In an Update posted on 20 June 2017 on the Cayman Islands ('Cayman) Automatic Exchange of Information Portal ('AEOI Portal) the Cayman Department for International Tax Cooperation ('DITC) advised that the AEOI Portal would be offline from 20 June 2017 while it installs the Common Reporting Standard ('CRS) functions. The DITC recommends reviewing here daily from 22nd June for details on when the AEOI Portal will be back up and running. It is expected to return within a few days and users have been asked not to email the AEOI Portal Team about the closure.
New extended 2017 deadline for Notifications
The deadline for new Notification/Registration and Variation of Reporting (Notification) Obligations for US FATCA/CRS has been extended to 31 July 2017. The Update reminds users that ALL Cayman Financial Institutions ('CFIs) MUST register on the AEOI Portal for US FATCA and the CRS or vary their existing US FATCA/UK CDOT registration to add the CRS, even if they have no Reporting obligations.
Where someone dies in a foreign country and leaves assets in the Cayman Islands (‘Cayman’), no-one can take possession of or in any way administer any part of the deceased’s Cayman estate without a grant of representation (‘Cayman Grant’) from the Cayman Court. Where the deceased is a non-resident it is often possible to get recognition in Cayman for the instrument of probate granted by the court of probate of that foreign country (‘the Foreign Grant’), provided that it has the same effect in the foreign country as a grant of probate/letters of administration would have under Cayman law. The simplest and cheapest option will be to get the Foreign Grant re-sealed in the Cayman Court so that the Representative or Representatives appointed by the Foreign Grant can deal with the Cayman assets as well as the assets in the foreign jurisdiction.
Who is affected by the National Pension (Amendment) Law 2016 (‘the Law’)?
The Law and the Normal Age of Pension Entitlement Option Order (‘NAPEO’) NAPEO affect pension plans (‘Pension Plans’) established and maintained by a pension provider regulated by the Cayman Islands Monetary Authority for the benefit of employees (‘Employees’) in the Cayman Islands (‘Cayman’). Those who work for the Cayman government contribute to the Public Service Pension Fund (‘PSPF’) and information on the PSPF and the Public Service Pensions Law (2017 Revision) (‘PSPLaw’) is in the relevant sections below.
Five steps to compliance with the Cayman Economic Substance test...
The Cayman Islands (‘Cayman’) International Tax Co-operation (Economic Substance) Law,...