Cayman announces move toward greater corporate transparency

Mon 28 Oct 2019

In early October, the Cayman Islands Government published a commitment to implement a public register of the beneficial ownership of companies registered in the jurisdiction. In widely publicised recent legislation such as the EU fifth Anti-Money Laundering Directive, the EU, supported by the UK, has moved to increase openness. The EU plans to create and adopt common approaches to transparency with regard to global money movements and investment.  The aim is to eliminate the secrecy associated with ‘hidden’ company ownership. This secrecy is often thought to facilitate tax evasion and the transfer of criminal funds around the globe.

One such move is due to culminate in 2023 when legislation to create public registers of beneficial company ownership is to be implemented by EU states with a view to this becoming the international standard. The Cayman Islands commitment is to advance legislation to introduce public registers of beneficial ownership ‘when that occurs’.  At present, it can be almost impossible for a person without access to inter-governmental information exchange facilities, to discover who owns a company registered there.  This could change radically when the register is made public.

Legislation passed in 2018 by the UK Government, required British Overseas Territories, such as the Cayman Islands to bring in these public registers. This was initially resisted with the move being seen as an attempt to interfere with the Territories self-government and a risk to their financial security.  The Territories often pointed out that there was already machinery to exchange ownership  information with overseas tax and law enforcement agencies when asked. Against this background, the announcement is a positive step towards greater global cooperation and highlights how company ownership transparency is crucial in the battle against financial irregularity and it is hoped that the remaining British Overseas Territories will follow suit.

We have used our knowledge and experience to assist clients in considering whether they are at risk regarding greater transparency or offshore matters in general. If you would like to discuss or any other tax matters further then please call us on 0207 063 4639 or 0161 238 9235 to speak to a member of our Tax Investigations team. 

By Bill Duggan, Tax Manager