Practical steps

• For all Cayman legal entities, confirm classification – all legal entities established in Cayman must formally assess whether they are in-scope and document the results of such assessment.
• For Out-of-Scope legal entities – maintain record that classification analysis has been completed and basis upon which the entity is out-of-scope; implement process to review classification on a regular basis; respond to requests for confirmation from the registered office provider; consider obligation as Registrable Person (see below).
• For ISCs only, instruct the registered office to establish a beneficial ownership register.
• For ISCs only, identify the individuals or relevant legal entities who are Registrable Persons (and send notices to persons the ISC considers may be Registrable Persons if necessary) and provide the required particulars to the registered office (see "Obligations of ISCs" for more details).
• For all individuals and Cayman-legal entities, whether ISCs or out of scope, consider Registrable Person status – irrespective of whether they are in-scope or not, individuals and legal entities incorporated, formed or registered (including as a foreign company) in Cayman should determine if they directly or indirectly own an interest in a Cayman company or LLC. If so, they should try to determine if the company or LLC is an ISC and if the size of their interest may make them a Registrable Person. Cayman companies should document the results of such assessment (see "Obligations of Registrable Persons" for more details).
• For all individuals and Cayman-legal entities, whether ISCs or out of scope, proactively contact any ISC in respect of which such person believes he, she or it may be a Registrable Person.
• For all individuals and Cayman-legal entities, whether ISCs or out of scope, respond within 30 days to any legitimate notices received from an ISC requesting particulars of Registrable Persons.

Classification - out-of-scope

• Partnerships (including exempted limited partnerships) are not covered by the Regime.
• Trusts (including unit trusts) are not covered by the Regime.
• Bodies that are not legal persons are not covered by the Regime.
• Foreign entities that register as "foreign companies" in Cayman are not ISCs.
• companies listed on an approved stock exchange;
• companies that are registered with CIMA under the Mutual Funds Law;
• companies registered with CIMA as excluded persons under the Securities Investment Business Law, such as many Cayman-incorporated investment managers and investment advisers;
• other licensed companies in Cayman such as banks, trust companies and insurance managers;
• companies managed, arranged, administered, operated or promoted by an approved person as a special purpose vehicle, private equity fund, collective investment scheme or investment fund (a Managed Entity);
• companies that are general partners of Managed Entities; and
• companies that are subsidiaries of companies that fall within the above categories, i.e. companies whose out-of-scope parent(s) hold more than 75% of the shares or voting rights of the subsidiary, or the right to appoint and remove a majority of the board of the subsidiary; or companies that are themselves subsidiaries of such a subsidiary.

Classification – in-scope

• personal holding companies;
• private trading companies;
• joint venture companies;
• holding companies and subsidiaries in private corporate groups;
• small unregulated funds that are self-administered or managed by a non-regulated manager;
• some carry vehicles; and
• private unlicensed businesses trading in Cayman.

Who is a Beneficial Owner?

• hold, directly or indirectly, more than 25% of the company's shares;
• hold, directly or indirectly, more than 25% of the voting rights of the company;
• hold, directly or indirectly, the right to appoint or remove a majority of the company's board of directors; or
• have the absolute and unconditional legal right to exercise, or actually exercise, significant influence or control over the company.
• have the absolute and unconditional legal right to exercise, or actually exercise, significant influence or control over a trust, partnership or other entity which owns the company.

What is a Relevant Legal Entity?

Who is a Registrable Person?

Obligations of ISCs

• engage a licensed Cayman corporate services provider (CSP) to maintain an adequate, accurate and current beneficial ownership register for the ISC at the ISC's registered office in Cayman;
• take reasonable steps to identify individual beneficial owners and relevant legal entities;
• give notice to all beneficial owners and relevant legal entities requiring such persons to confirm their status as Registrable Persons and their registration details within one month of the notice;
• provide to its CSP the required particulars of such Registrable Persons once those particulars have been confirmed;
• instruct the CSP to enter the required details of Registrable Persons into the register, or a nil return; and
• upon becoming aware of any change to the particulars of a Registrable Person stated in its register, give notice to the Registrable Person as soon as reasonably practicable requesting confirmation of the change.

Obligations of Registrable Persons

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Security of Information