Cayman Islands introduces penalties for Beneficial Ownership Disclosure Failures

From 29 June, the Cayman Islands Registrar of Companies will have authority to impose fines for breach of the beneficial-ownership-reporting regime.

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Under amendments to the Companies Law (2020 Revision) and the Limited Liability Companies Law (2020 Revision), non-exempt companies and limited liability companies must take reasonable steps to identify beneficial owners and provide their particulars to their Cayman Islands corporate service providers. Companies claiming exemption from the regime must provide written confirmation of this exemption.

Beneficial owners and other entities in the ownership and control structures of entities that are within the regime’s scope must cooperate in providing relevant information to the relevant in-scope entities, or be liable to the fines now being introduced.

The penalties start at USD6,100 for the initial breach. Continuing breaches will attract further monthly fines of USD1,220, up to a maximum of USD30,500 for a single breach. Companies that fail to pay within 90 days may be struck off the register and dissolved.

‘It is now important for all companies and limited liability companies to review their compliance with the beneficial ownership regime’, commented law firm Maples. This includes the accuracy of any beneficial ownership register or written confirmation of exemption maintained with their corporate services provider in the Cayman Islands.