Cayman Islands Compliance Updates


Share on facebook
Share on twitter
Share on linkedin


This piece covers multiple updates on business, regulation, legal, reporting deadlines and references in Cayman Islands that will impact your business.

Key Business Updates

Private Fund Law

The Cayman Islands, pursuant to the Private Funds Amendment Law 2020 introduced changes to Private Funds resulting in certain funds falling into the purview of the Cayman Islands Monetary Authority (CIMA) regulation.

A Private Fund would include any fund that:

  • is established for more than one investor;
  • is established as a company, unit trust or partnership;
  • its principal business is the offering and issuing to investors of its participating, non-redeemable investment interests;
  • has as its purpose or effect of which is the pooling of investor funds with the aim of spreading investment risk and enabling investors to receive profits or gains from such investment activities;
  • the investors do not have day-to-day control over the fund’s investment activities and the investments are managed as a whole by or on behalf of the fund operator for reward based on the fund’s assets, profits or gains.

What does it mean for Private Funds?

Managers, sponsors or GP’s of Private Funds will have to register with CIMA and comply with the associated duties and responsibilities, including the requirement to:

  1. Custodian: appoint a custodian to hold assets in segregated accounts, where a custodian is not appointed pursuant to Article 17, a fund administrator may be appointed to provide segregation (Article 17(4)(a)), such as Apex, which is regulated by CIMA to provide custody services under its Trust Licence;
  2. Directors: appoint 2 directors (corporate form) or 2 individual partners (Partnership);
  3. Audited Statements: provide an audit of the financial statement performed by a CIMA approved Caymans registered audit firm;
  4. Annual Valuations: perform valuations at least once a year;
  5. Cash monitoring: appoint a person to independently monitor cash movements, such as a fund administrator (Article 18(1)(a)), such as Apex through its global fund administration solutions;
  6. Securities Identification: for Private Funds that trade securities or hold them on a consistent basis, maintain a record of the identification codes of the securities it trades and holds and shall make this information readily available to CIMA upon request. This can be provided by Apex through its global fund administration solutions Annual Fee: an annual fee payable to CIMA by January 15 of each year;
  7. Annual Return: file an annual return to CIMA for each financial year;

Key Regulatory Updates

Cayman may be re-added to EU blacklist

The Cayman Islands were removed from the European Union “EU” Annex I list of non-cooperative jurisdictions for tax purposes on October 6, 2020. However, the European Parliament held a meeting on December 7, 2020 to plan a new blacklist of tax havens and intend to include the Cayman Islands.

The EU is relying on the research from the Tax Justice Network which claims that 60% of the profit which goes through the Cayman Islands escapes taxation in their countries, compared to a mere 2% going through nations that are currently on the blacklist.

The Cayman Islands Government and Cayman Finance intend to conduct a review into the Tax Justice Network’s research which they have described as having “fundamental statistical flaws and needed to be addressed”.

Updated FAR for mutual funds

CIMA has issued an updated Fund Annual Return (FAR) Form reflecting the requirements introduced by the Mutual Fund (Annual Return)(Amendment) Regulations 2020.  Any mutual funds with a financial year end of June 30, 2020 or later must use the updated FAR Form.

Private Funds registered under the Private Funds Law (Revised) will have a separate FAR Form.  This remains under consultation and has not yet been published by CIMA.

Key Legal Updates

Cayman Island Constitution Changes – Acts of Parliament Law, 2020

The Cayman Islands has become the third British Overseas Territory to have a legislature known as the Parliament.  As part of the recent changes from the Legislative Assembly to Parliament, the Citation of Acts of Parliament Law, 2020 was passed on December 7, 2020 and came into effect on December 8, 2020. Due to the Citation of Acts of Parliament Law, 2020 all laws in the Cayman Islands will change their name to replace “Law” with “Act”.

Reporting Deadlines

FATCA /CRS Reporting

DITC Portal: There was a delay in the launch of the Department for International Tax Cooperation’s (DITC) new electronic portal (DITC Portal) for FATCA and CRS registration and reporting.

The DITC has clarified that users are able to use the new portal to register new FIs, complete AP/PPoC/Secondary User updates, submit CRS Compliance Forms and FATCA Returns.

CRS Compliance Form for 2019: The DITC has confirmed that the deadline to submit the CRS Compliance Form for 2019 has been extended to September 15, 2021. Please note that this deadline will coincide with the deadline for the 2020 Reporting Period.

The updated reporting for the forthcoming deadline is as follows:

  • CRS Compliance Form for 2019 – September 15, 2021
  • CRS Compliance Form for 2020 – September 15, 2021

Economic Substance

Entities are now able to submit ES notifications for 202x financial years commencing in 2020. The DITC has announced new filing deadlines for Economic Substance Filings.

Period End Date (for purposes of the ES Return)

ES Obligation


December 31, 2019 – 30 April 2020

ES return (all except IP Business)

April 30, 2021

May 1, 2020 – onwards

ES returns

12 months after the period end date

December 31, 2019 – February 29, 2020

ES Return with Type Income: Relevant Activity – IP Business and Form for Entity Tax Resident in Another Jurisdiction

February 28, 2021

March 1, 2020 – onwards

ES Return with Type Income: Relevant Activity – IP Business and TRO

12 months after the period end date

Please note that all Cayman corporate entities are required to submit the annual economic substance notification confirming whether or not they were a Relevant Entity during their economic reporting period commencing in 2020.  This is a prerequisite to filing the entity’s annual return and includes investment funds.

Reference Updates

CIMA Guidance Updated

The Cayman Islands Monetary Authority acts and regulations are accessible here.

Please find below the most recent CIMA guidance updates: 


How we can help

We provide full support to Cayman’s Private Funds for compliance with their regulatory duties for Cayman Islands domiciled Private Funds, including our custody services through our CIMA regulated Custodian.

To support the independent oversight with cash monitoring, we can provide independent fund administration services.

We provide support in the preparation and submission of FAR and CRS forms and will continue to monitor the development of all regulatory issues closely. We encourage you to subscribe to our Regulatory Updates to keep up to date with global regulatory changes affecting your business.

Speak to our expert team today to learn more.

Related Services

Related Content

Global Compliance Regulatory Update: 2020 Q4


Share on facebook
Share on twitter
Share on linkedin

Get in touch with our team

Submit your query

Cookie control
This website uses cookies so that we can make your experience better. If you wish to change your cookie settings please refer to our Privacy Policy. Otherwise we will assume you’re OK to continue. Privacy Policy