Supervisory and Licensing Regime and Fees
In addition to the above-mentioned legislation, The Banks and Trust Companies Law (2009 Revision) provides the legal framework for trust supervision in the Cayman Islands.
There is a large and sophisticated community of professional advisers on trust matters in Cayman. Individuals can provide trust services in the Cayman Islands without registration, but companies offering trust services must be licensed under the Banks and Trust Companies Law 1995, as amended in 2001, 2003, 2007 and 2009. Foreign or Cayman-resident companies may obtain licenses. These are issued by the Governor, after the Cayman Islands Monetary Authority (CIMA) has accepted an application giving comprehensive information about the applicant.
Trust licenses are now as follows:
Trust licences, covering the conduct of trust business within and outside of the Islands but subject to such conditions as may be imposed by the Authority
Restricted Trust licences, covering the conduct of trust business with the restriction that the licensee shall not undertake trust business for persons other than those listed in any undertaking accompanying the application for the licence;
Nominee (Trust) licences, covering trust business under a Trust licence to a licensee which is a wholly-owned subsidiary of another licensee and where the sole purpose of that subsidiary is to act as its nominee.
Companies holding any type of trust licence must have a place of business in the Islands, approved by CIMA, which will be its principal office in the Islands; and must have two individuals or a body corporate, approved by CIMA, resident or incorporated in the Islands, as its agent. Any trust licensee incorporated in the Cayman Islands must submit annual audited accounts to CIMA.
In common with many other offshore jurisdictions, the Cayman Islands has responded to pressure from the OECD and FATF by tightening up its regulatory regime. Specifically, Cayman responded to its inclusion on the FATF black-list of jurisdictions which have weak anti-money laundering legislation, and the November, 2000 KPMG Independent Review of Financial Sectors in the Caribbean Overseas Territories.
In July 2000 CIMA's regulatory powers were enlarged under amendments to the Monetary Authority Law and the regulator was granted the power to assist overseas regulators by disclosing information about overseas clients. Cayman also issued the Proceeds of Criminal Conduct Law (Money Laundering) Regulations 2000, and in April 2001 issued guidance notes on the prevention and detection of money laundering.
Under the Banks and Trust Companies Law (2001 Revision), CIMA was empowered to conduct fit and proper test of directors, officers and shareholders of institutions licensed to operate within or from within the Cayman Islands.
This legislation has since been revised several times, as previously mentioned.
In August 2009, the Cayman Islands signed its 12th tax information exchange agreement (TIEA), with New Zealand, and moved onto the “white list” of countries that have “substantially implemented” the OECD’s internationally agreed tax standard.
The Cayman Islands’ Leader of Government Business/Premier Designate, McKeeva Bush, said: The Cayman Islands Government sees the OECD’s recognition as a natural outcome of the country’s substantial commitment to uphold an equally world-class international cooperation regime in the exchange of tax information."
The TIEA allows the authorities in both countries to request direct tax records, business books and accounts, bank information, ownership information, and other tax-related information for the purpose of detecting and preventing tax avoidance and evasion by each other’s residents. Such information shall be that which is relevant to the determination, assessment and collection of direct taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters.