Cayman Islands: Law of Offshore
Table of Statutes
This is a non-exhaustive list of the main Cayman Islands statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute, the legal regime it forms part of, or in some cases the text of the law.
Banks & Trust Companies Law 1995, amended 2003 and 2009
Companies Law 1995
Companies Law (2007 Revision)
Companies (Amendment) 2009 Law
Confidential Relationships (Preservation) Law 1995
Exempted Limited Partnerships Law 1991
Fraudulent Dispositions Law 1989
Immigration Law 1992
Immigration (Amendment) Act 2010
Insurance Law 1979 (as amended)
Local Companies (Control) Law 1995
Maritime Authority Law 2005
Mutual Fund Law 1993 as amended
Partnership Law 1995
Perpetuities Amendment Law 1997
Perpetuities Law 1995
Proceeds of Criminal Conduct (Amendment) (Foreign Offences) Law 1999
Proceeds of Criminal Conduct Law 2008
Registration of Merchant Ships Law 1991
Securities Investment Business Law (2001) as amended
Segregated Portfolio Company Law 1998
Special Trust (Alternative Regime) Law 1997
Stamp Duty Law 1995
Stock Exchange Company Law 1996
Trade and Business Licensing Law (1995 Revision)
Trust (Foreign Element) Law 1997
Trust Law (1996 Revision)
In early 2006, the Cayman Law Reform Commission set itself the ambitious task of transforming many aspects of the jurisdiction's legal framework, in a bid to bring it up to date with legal practice in other financial centres.
"Cayman is among the world's leading financial centres and it is therefore paramount that our laws and legal system should endeavour to remain contemporary," the Attorney General, Hon. Sam Bulgin, QC, told the Commissioners when they met with him.
"Political and social stability, and a significant and modern communications and financial infrastructure mean nothing unless we have the necessary and relevant laws available to members of our legal profession so they can advise their clients properly," he added.
Mr Bulgin noted that the "pioneering" new committee would be responsible for developing new areas in the law, codifying unwritten laws and examining the underlying causes of dissatisfaction with any law or its administration.
The Commission intended over the subsequent two or more years to examine 15 areas of the law, outlined by the Senior Legislative Counsel Cheryl Ann Neblett who heads the Commission's office. These include: evidence; corruption; contempt of court; proceeds of crime; alternative sentencing; juvenile justice; regulation of legal practitioners; legal aid; consumer protection; maintenance, affiliation and matrimonial causes; landlord and tenant legislation; and children's legislation.
Thus far, a number of individuals and organisations have been consulted as part of the legal overhaul process, including attorneys-at-law, rental agencies and the Chamber of Commerce. Ms Neblett has also urged members of the public to offer their input into the process.
The Commission has already commenced work on the reform of a number of matters, which include the Landlord and Tenant legislation, the Legal Practitioners Bill and the Legal Aid Bill.
In mid-2006 the Jersey Financial Services Commission added the Cayman Islands to its list of countries and territories considered to have an equivalent anti-money laundering framework.
The move was seen by the Cayman Islands Monetary Authority as being of significant benefit to Cayman-based financial institutions and their clients which do business with financial institutions in Jersey.
The recognition allows Jersey's customer identification procedures to be satisfied if the client has met Cayman's customer identification requirements. This potentially saves time and resources that would otherwise have to be spent processing and supplying duplicate know-your-customer documentation to Jersey.
Jersey's anti-money laundering legislation and guidance provide in certain circumstances for a financial services business to place reliance on another institution to conduct customer identification procedures, where the institution is subject to obligations equivalent to those in Jersey, and where an overseas regulatory authority supervises the institution.
The listing of Cayman came after months of discussion between the Cayman Islands Monetary Authority (CIMA) and its Jersey counterpart, as well as CIMA's lobbying at international forums such as the Overseas Group of Banking Supervisors for reciprocal recognition of equivalent anti-money laundering/counter terrorist financing (AML/CFT) frameworks among jurisdictions.
"We are pleased that Jersey has now added us to its list. The issue of equivalency listings relating to AML/CFT regimes is something CIMA has been concerned about for some time," commented CIMA Managing Director Cindy Scotland.
"We continue to engage in bilateral negotiations with regulators in countries where Cayman is not currently listed as having equivalent AML/CFT regimes," she added.
Mrs Scotland further explained that collaboration between CIMA and the Jersey Financial Services Commission was being further extended through a memorandum of understanding on information exchange and cooperation.
The Cayman Islands Monetary Authority (CIMA) became the 189th member of the International Organization of Securities Commissions (IOSCO) in June 2009 when it was formally admitted as an ordinary (ie full) member during the meeting of the Presidents' Committee at IOSCO's 34th Annual Conference in Tel Aviv, Israel.
With the admittance, CIMA also officially becomes a party to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation, Cooperation and the Exchange of Information. CIMA signed the MMOU, which is the benchmark for international cooperation among securities regulators, on 24 March 2009.
IOSCO is the principal global standard setting body for the regulation of securities markets. Its objectives encompass cooperation and information exchange, standard setting and surveillance, and mutual assistance.
In her remarks to the IOSCO President's Committee in response to the granting of membership, CIMA's Managing Director, Cindy Scotland, told the gathering:
"Our formal admission into IOSCO today marks the culmination of a period of mutual engagement, dialogue and action by our two bodies. It serves as a testament to the good faith of both sides in seeing the process through, and is an example of what can be accomplished when international standard setters engage jurisdictions as equal partners with a common objective."
She added that the move "represents a strong validation by IOSCO of our ability and our willingness to engage other regulators to facilitate cross-border information exchange and assistance."
Scotland commented separately that the granting of membership was an accomplishment not just for CIMA but for the jurisdiction as a whole as the membership screening and jurisdictional assessment process had been rigorous.
CIMA's Deputy Managing Director – General Counsel, Langston Sibblies, who also attended the forum, explained that, in addition to being an acknowledgement of the Cayman Islands regulatory system and international cooperation regime, IOSCO membership has significant commercial benefits for this jurisdiction:
"Some countries either do not allow investment vehicles from non-IOSCO member countries to be sold in their jurisdictions or will require greatly enhanced due diligence which makes it more difficult to do business with those jurisdictions. IOSCO membership will remove these impediments and open up these markets for Cayman-domiciled securities providers. This is a development our private sector has looked forward to for a long time. It will be welcomed by the private sector."
In 2009, the Companies (Amendment) Law, 2009, effective May 11, 2009, introduced a simpler mechanism for company mergers and consolidations without the need for court approval.