Offshore Trusts Report: Cayman Islands
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
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
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.