As of 10 June 2016, the Cayman Islands (‘Cayman’) General Registry (‘GR’) has introduced a new paperless voluntary liquidation service for Cayman registered corporate entities. The system is already available to Cayman Island Online Registry Information Service (‘CORIS’) subscribers via the Cayman GR Electronic Document Management System (‘EDMS’). The system ran concurrently with the existing manual system until 30 June 2016, but as of 1 July 2016 all company liquidation filings must be done via EDMS.
As part of its continuing drive to ensure Cayman Islands (‘Cayman’) corporate governance meets or exceeds the latest international standards, on 8 June 2016 the Cayman Islands Monetary Authority (‘CIMA’) introduced The Rule - Corporate Governance For Insurers (‘R-CGI’ or ‘Rule’). This imposes specific obligations on insurers regulated by the Authority under the Insurance Law, 2010 and is the first time insurers have been subject to a Rule on corporate governance rather than a Statement of Guidance (‘SOG’).
Globe Motors, Inc and others v TRW Lucas Varity Electric Steering Ltd and another 
In April 2016 the England and Wales Court of Appeal (‘EWCA’) considered whether parties had agreed to vary their contract between them by their conduct over time, despite their contract’s express provision that it could only be amended by a written document, signed by both parties, which specifically referred to the amendment provision. The conclusions reached by the EWCA judges would not be binding authority on the Cayman Islands Grand Court, but would be considered persuasive argument.
The Cayman Islands (‘Cayman’) Department for International Cooperation (‘DITC’) has issued final deadlines for Cayman financial institutions (‘FI’s) to complete their notification and reporting under automatic exchange of tax information (‘AEOI’) agreements with the United Kingdom (‘UK’) and the United States of America (‘US’). It has also updated its User Guide for the AEOI Portal. Finally, a new law allows the Cayman Government to establish a penalty regime for breach of Tax Information Authority Regulations (‘TIA Regs’).
Basdeo v The Hon. Min of Finance as Ex Officio Commissioner for the Collection of Stamp Duty
In March 2016 the Cayman Islands (‘Cayman’) Grand Court ruled on the correct basis to value property for the purpose of calculating Stamp Duty. Although the sum involved was small in this instance, the Court commented that it was clear that the matter was ‘....an issue of principle that may well affect many other conveyances’.
The Confidential Information Disclosure Bill, 2016
On 12 May 2016, the Cayman Islands (‘Cayman’) Government published The Confidential Information Disclosure Bill, 2016 (‘the Bill’). The main purpose of the Bill is to repeal and replace The Confidential Relationships (Preservation) Law, 2015 (‘the old Law’). The repeal of the old Law (which they described as having ‘often … been misrepresented as Cayman’s ‘secrecy law’’) ’was confirmed on 11 May 2016 by the Cayman Premier Alden Mclaughlin and Minister for Financial Services Wayne Panton in joint announcements relating to new Cayman co-operation on an initiative to establish a global standard for the exchange of beneficial ownership information (11 May 2016 Announcement).
Cayman Enterprise City Launches Branding for Individual Zone Parks
The Cayman Islands (‘Cayman’) Special Economic Zone ('SEZ'), Cayman Enterprise City ('CEC'), was developed to fast track international companies working in high-tech sectors to establish a genuine physical presence in Cayman. In the four years since it was established the CEC has been populated by over 170 companies from around the world and is about to start work on a new campus. Independent, sector-specific Zone Parks have been designed to foster an individual identity focused on encouraging innovation and creativity for each of its core industry groups: Internet & Technology; Media, Marketing or Film; Biotechnology & Life Sciences; Commodities & Derivatives; and Maritime Services. The Cayman Media Park hosted their 2nd annual IMPACT conference in April 2016 to an audience that included tech giants Google, Microsoft and Evite. Here we look at the advantages to tech companies of establishing themselves in the Cayman SEZ.
The Cayman Islands (‘Cayman’) government ('CIG') has passed The Limited Liability Companies Law, 2016 (the ‘Law’) on 28 April 2016, making Limited Liability Companies (‘LLCs’) available as an alternative form of corporate entity in Cayman.
In identical announcements on 11 May 2016, Cayman Islands (‘Cayman’) Premier Alden McLaughlin (‘the Premier’) and Minister for Financial Services Wayne Panton (‘the Minister’) confirmed that Cayman will join an initiative (‘the Initiative’) for the development of a global standard for the sharing of beneficial ownership information (‘BOI’). Cayman has also announced it will invite other participants in the Initiative to enter into agreements similar to the Exchange of Notes (‘EoN’) which Cayman agreed with the UK earlier this year.
Leisure and tourism is booming in Cayman.
We’ve seen a lot of exciting deal activity here in this sector in the last twelve months – we acted for a major international investor acquiring both the Westin and Sunshine Suites resorts; London & Regional purchased the Marriott Hotel; and Dart Realty completed its acquisition of the Beach Suites and former Hyatt resorts.
Dart is also on schedule to complete construction of the Kimpton Seafire Resort and Spa this year, recently featured by Forbes Magazine as one of the twenty most anticipated hotel openings of 2016.
And with the current owners of The Ritz-Carlton Grand Cayman now looking for a buyer, this is a great time to take a look at five key issues to consider when investing in hotels and resorts in the Cayman Islands.
Making a Will and keeping it up to date is something we all know we should do, and something that often gets postponed. Here we take a short look at why it’s important to keep your Will under review, the events which mean you should consider whether to change your Will and give some examples of the type of problems beneficiaries can face.
Why should I make a Will?
One of the best reasons for leaving a Will is that it gives you a say in important decisions taken after your death: -
Sophia Harris, Ian Jamieson, Adam Johnson and other team members acted for a major investor in the hospitality industry as the purchaser of the Sunshine Suites and Westin Hotel resorts, a popular boutique hotel and major resort respectively, both located on Grand Cayman's Seven Mile Beach. Solomon Harris advised the purchaser on all Cayman law aspects of the acquisition of the hotels including: the corporate structure for the purchases; the transfers of real estate, business and other assets; the financing of the deals and the structuring of the lender’s security package; business and regulatory licensing; employment and immigration; general commercial contracts; and negotiation with the various Government departments for the extension of the underlying leases.
“This was a great opportunity for us to showcase our multi-disciplinary expertise on another high value, complex deal involving a number of different parties and challenging objectives,” said Ian Jamieson, partner and Head of Property and Banking Finance. “It demonstrated our Firm’s full depth and breadth of experience in its Property/Financing department with key lawyers such as Adam Johnson playing a vital role in order to ensure that the transaction was closed as quickly as possible and all of the client’s commercial goals were met. As part of this, we created an innovative structure to maximize deal value, and then successfully project managed its delivery. This is a major investment in the Cayman Islands – we’re very excited about the future of this project and its contribution to our economy.”
Other parties included Sidley Austin as onshore counsel for the purchaser and another top tier Cayman Islands law firm acted for the seller of the Sunshine Suites and also the provider of financing.
The information contained in this article is necessarily brief and general in nature and does not constitute legal advice. Appropriate legal or other professional advice should be sought for any specific matter.
In an Industry Advisory dated 8 April 2016 the Cayman Islands (‘Cayman’) Ministry of Financial Services advised that the Department for International Tax Cooperation (‘DITC’) will take a soft approach to enforcement of notification and reporting due dates for 2016 under agreements for the United Kingdom Commonwealth Dependencies and Overseas Territories (‘UK CDOT’) and United States of America Foreign Account Tax Compliance Act (‘US FATCA’). The deadlines under both agreements are 30 April 2016 for Notifications and 31 May 2016 for Reporting, but the Ministry advises that provided Cayman Reporting Financial Institutions (‘FIs’) comply with the new dates below there will be no enforcement measures or other adverse consequences. The DITC’s Automatic Exchange of Information (‘AEOI’) News and Updates page (see AEOI_News_&_Updates.pdf) has given details of current and pending updates to its AEOI Portal User Guide (‘Portal Guide’) in March and April 2016, and further guidance in the form of AEOI FAQs should be online soon. Below is a summary of the latest updates as at 12 April 2016, but readers should always check the news and Updates page and Portal Guide for details and the latest updates - AEOI Portal User Guide).
Cayman Minister of Finance speaks out on effective global collaboration by law enforcement and tax authorities
The Cayman Islands (‘Cayman’) Minister for Financial Services and the CEO of the financial services industry body, Cayman Finance, have both issued statements addressing the issues raised by the recent leak of information from a law firm in Panama. The leak has drawn negative press attention to international financial centres (IFCs), including those which are not mentioned in the leaked documents (like Cayman). In their statements, Minister Panton looks at current and future action being taken to further improve international transparency for the future, whereas Mr Scott of Cayman Finance stresses the need for a clear understanding of the positive role which international financial centres play in the global economy.
The United Kingdom Court of Appeal has considered whether any or all of a meeting between a firm of solicitors and a litigant in person was covered by without prejudice protection. Here we look at how the Court approached the situation where there was no agreement or statement that the meeting would be conducted without prejudice, the ostensible purpose of the meeting was not to negotiate settlement of the litigation and parts of the meeting were open. We also look at how the Court addressed the issue of whether the protection had been waived or was being abused.
A decision of the Cayman Islands (‘Cayman’) Grand Court (‘Court’) has created uncertainty on whether the Directors of a Cayman company incorporated prior to November 2009 can petition for the company’s winding up (i.e. liquidation) without the sanction of the company’s shareholders. Here we look briefly at the uncertainty generated by the decision and what steps directors might take until the issue is clarified.
The European Commission (‘EC’) has responded to the advice from the European Securities and Markets Authority (‘ESMA’) on extension of the Alternative Investment Fund Managers Directive (‘AIFMD’) passport regime. It has asked that ESMA complete the third country assessments of the Cayman Islands (‘Cayman’) and the United States (‘US’) by June 2016.
The Limited Liability Companies Bill, 2015 (the ‘Bill’) was published in the Cayman Islands (‘Cayman’) on 18 December 2015. This legislation is expected to result in Limited Liability Companies (‘LLCs’) being available in Cayman as an alternative form of corporate entity sometime during the first half of this year.
STANDARD FOR AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION IN TAX MATTERS
The Standard for Automatic Exchange of Financial Account Information in Tax Matters (also known as the “Common Reporting Standard” or “C.R.S.”) is a global system of automatic exchange of information for tax purposes (“A.E.O.I.”). As of January 1, 2016, financial institutions (“F.I.’s”) in jurisdictions that have signed up as members of the Early Adopters Group (“E.A.G.”) of the C.R.S. are obligated to gather identification and residence information from new account holders to pass it to their jurisdictions’ reporting authority in order to enable reporting of the accounts. By 2018, the 96 jurisdictions that have adopted the C.R.S. will be exchanging information on those account holders identified as reportable between their respective reporting authorities. F.I.’s and tax authorities still need to work through all the details, but below is a brief introduction to the system, how it is expected to work, and some potential pitfalls.
Property Alliance Group v The Royal Bank of Scotland
The UK High Court (‘Court’) has considered whether secret recordings made by one party prior to the start of litigation are covered by ‘litigation privilege’. The recordings were of meetings between the founder ('R') of Property Alliance Group Limited (‘PAG’) and former employees of a division of a UK bank (‘RBS’) who thought the meetings were for them to attract future work from PAG and who were not aware that their meetings were being recorded.
Five steps to compliance with the Cayman Economic Substance test...
The Cayman Islands (‘Cayman’) International Tax Co-operation (Economic Substance) Law,...