EU recognizes Cayman as cooperative on transparency and fair taxation

In a widely anticipated move, at a meeting on 6 October 2020 the Council of the European Union (“EU”) recognised the Cayman Islands (“Cayman”) as cooperative on both transparency and fair taxation reversing a February 2020 decision (see EU Press Release, here). The move brings the EU in line with other respected international entities like the Organisation for Economic Co-operation and Development which identify Cayman as a transparent jurisdiction without harmful tax regimes.

Why is this important for Cayman?

Cayman retains its status as the leading international financial centre for private investment funds. As international standards for financial services have evolved rapidly in recent years, the Cayman Islands Government (“CIG”)  has fulfilled its commitment to international co-operation by implementing legislation to address economic substance, ring-fencing and funds (collective investment vehicles). The EU’s move recognises and validates the work done by the CIG to meet its 2017 commitment to cooperate with the EU. (For a full list of the relevant laws and regulations which Cayman has introduced since December 2018, see here). The move also recognises Cayman’s commitment to a responsible policy of tax neutrality that poses no harm to other countries.

Cayman Reaction

Cayman’s Premier, the Hon. Alden McLaughlin, reaffirmed that Cayman remains fully committed to international tax good governance standards. Cayman Finance and the Cayman professional bodies expressed their appreciation of the CIG’s working relationship and cooperation with the EU over many years that helped produce this outcome, see here. The Financial Industry welcomed the EU’s decision as an important validation of Cayman’s commitment to a responsible policy of tax neutrality that poses no harm to other countries.

Bedell Cristin

Bedell Cristin offers over 20 years’ experience in the formation, regulation, ongoing transactional/litigation advice and dissolution of all types investment vehicle in the Cayman Islands. If you are considering forming a Cayman fund or are already managing an existing Cayman entity and require transactional or litigation support or further assistance in its regulation or dissolution contact Joss Morris or Laura Hatfield.