Knowledge

With the end of the calendar year approaching, it is important to consider the regulatory obligations and filing deadlines that may be applicable for Cayman Islands entities. Below is a reminder of certain upcoming filing considerations and annual fees.

Annual returns, annual fees and economic substance

Cayman Island entities are required to file an annual return and pay annual registration fees to the Cayman Registrar of Companies (the "Registrar") in January. Prior to this, all Cayman Islands entities (including foreign registered companies) are required to also file an annual economic substance notification ("ESN"). The entity's registered office will typically carry out the filing of the ESN and annual return and make the annual payment for the Cayman Islands entity.

The Registrar will consider a Cayman Islands entity to not be in good standing if the ESN, annual return and annual registration fees have not been filed and paid by 31 January. Late payment penalties will accrue if these are not filed and paid by 31 March.

CIMA registration

Cayman Islands entities that are registered with the Cayman Islands Monetary Authority ("CIMA"), including mutual funds and private funds, are required to pay 2024 annual licensing / registration fees to CIMA by 15 January. After this date, late payment penalties accrue.

Following last year's amendments to CIMA's regulatory procedures on termination, the License Under Termination 'LUT' status is no longer available. An entity in the process of terminating its license may no longer benefit from a reduction or waiver of CIMA's annual licensing or registration fee and is subject to the full CIMA fee for the subsequent year unless the entity's de-registration is complete and no further fees are due.

Registered and licensed directors

Under the Directors Registration and Licensing Act (as revised) of the Cayman Islands ("DRLA"), directors registered or licensed with CIMA must complete their annual declaration and pay their annual licensing / registration fee to CIMA by 15 January. 

If a director no longer requires CIMA registration, they must file a de-registration application under the DRLA prior to 31 December; otherwise, they may incur the full annual 2024 fee.

SIBA registered persons

All entities registered with CIMA under the Securities Investment Business Act (as revised) of the Cayman Islands ("SIBA") must file an annual declaration and pay their annual fee to CIMA by 15 January. 

Terminating entities

If an entity is to be terminated by way of voluntary liquidation, it may commence an expedited (at slightly greater expense than the ordinary course) process prior 1 December allowing sufficient time to meet the voluntary liquidations deadline of 31 January to minimise or avoid entirely payment of 2024 annual fees and costs. This termination process is recommended for entities that have engaged in trade, operations, or commercial transactions throughout their life cycle. Once completed the entity cannot be legally reinstated by an interested party, except in very limited circumstances.

For CIMA-registered entities, the CIMA de-registration process must be completed prior to an entity being dissolved and therefore deregistration ought to be started as soon as practicable in order to meet the deadlines and avoid (however likely or unlikely at this stage) annual fees.  As mentioned above, an entity still in the process of terminating its license or registration as at 1 January will still be subject to the full CIMA fee for the subsequent year. If de-registration is unlikely to be completed by the deadline, the entity will need to make necessary reserves for its fees and costs.

Termination by way of strike off only becomes permanent after a 10-year period and may be more suitable for dormant or never traded entities. For the registered office to submit a strike off application, the entity must not be operating or have any outstanding regulatory matters. The next available strike off date is 24 March, however as next year's annual fees will apply, entities will need to make necessary reserves for such fees.