Further to our previous updates1, 2 regarding measures adopted by the Cayman Islands Government in response to COVID-19 the Government has now taken additional steps and granted further filing extensions in respect of the financial services industry.
Further Extension for Notification of Certain Changes to the Registrar of Companies
The deadline for notifying the Registrar of Companies ("ROC") in respect of certain changes has been extended to 31 May 2020. This extension relates to any changes occurring on or after 1 March 2020 to:
- Directors and other officers of companies and managers of limited liability companies;
- Registered office address;
- Memorandum and articles of association; and
- Increases in share capital.
Notably, while previous extensions also captured reductions in share capital, this has not been included in the most recent measures.
There has been no further extension to the previously announced deadline of 30 June 2020 after which penalties will apply in respect of annual return filings for Cayman Islands entities. Where fees / returns remain outstanding on 1 July 2020, penalties will be accessed at 33.33% of the annual fee, with penalties rising to 100% of the annual fee on 1 October 2020.
Please note that, notwithstanding the extended deadline, entities will only be deemed to be in good standing by the ROC once all annual return filings and economic substance filings have been duly completed and associated fees paid.
Remote Notarisation
The Cayman Islands Government has reacted to the impact of social distancing measures by introducing the Notaries Public (Virtual Conduct of Notarial Acts) Regulations, 2020 (the "Regulations"). These Regulations permit the use of audiovisual communications technology in connection with notarial acts and will initially be in effect for two years.
Prior to these Regulations, where a signature on a document required attestation by a Cayman Islands notary public, the primary signatory was required to execute the document in the physical presence of the notary.
Pursuant to the Regulations, the primary signatory may now, provided that primary signatory is physically located in the Cayman Islands at the time they apply their own signature, appear before a Cayman Islands notary public via audiovisual communications platforms such as Zoom or Skype. The notary public must satisfy himself or herself as to the identity of the primary signatory and must be able to observe the primary signatory's execution of the document. Upon receipt of an electronic copy of the executed document, the notary public may then apply their seal to, and sign, the electronic copy of the document before returning this notarised copy to the primary signatory.
It should be noted that these Regulations apply only to notarial acts. While legal entities will not generally require that the signatures of those signing on their behalf are witnessed, certain documents executed by natural persons may require a standard witness signature (as opposed to notarisation). In these circumstances, the Regulations will not apply and, under current Cayman Islands law, audiovisual communications technology cannot be utilised to facilitate the witnessing of the primary signature. Further advances in this area may develop in future weeks.
CRS Deadline Extended
The Cayman Islands Department for International Tax Cooperation ("DITC") has extended the deadline for CRS reporting for the 2019 reporting year to 16 November 2020. This follows the DITC's previously announced extension of the FATCA reporting deadline and, as a result, the extended reporting deadlines under both FATCA and CRS are aligned.
The DITC's extension to the CRS reporting deadline reflects an announcement from the OECD Global Forum on tax transparency, which recognised the impact of COVID-19 upon both financial institutions and competent authorities and extended the deadline for 2020 CRS exchanges from 30 September 2020 to 31 December 2020 as a temporary measure.
Footnotes
1. COVID-19 Cayman Islands Update: Additional Financial Services Concessions
2 Cayman Islands Financial Services COVID-19 Update
Originally published 6 May, 2020
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