What does es law mean for Cayman Islands?

The Cayman Islands has enacted The International Tax Co-operation (Economic Substance) Law, 2018 (the “ ES Law ”) as a result of the OECD’S global Base Erosion and Profit Shifting (“ BEPS ”) initiative and the EU Code of Conduct Group substance requirements modelled on BEPS Action 5.

Do Cayman vehicles have economic substance?

Under the ES Law, certain vehicles formed or registered in the Cayman Islands are required to have economic substance in the Cayman Islands. This requirement is primarily aimed at preventing 'base erosion and profit shifting'.

Do I need to file a tax return outside the Cayman Islands?

Entities which are tax resident outside the Cayman Islands must also make an annual filing with the TIA. A Relevant Entity that is carrying on a Relevant Activity will generally be required to have substantial activities in the Cayman Islands, also known as “economic substance” and satisfy the applicable economic substance test (the “ES Test”).

Why did the Cayman Islands issue an ESA?

The ESA has been issued in response to the Cayman Islands’ commitment to the global initiative to combat base erosion and profit shifting.

What does the Cayman Islands guidance mean for investors?

investors or CIMA.The Guidance provides that:“Given the stringent regulatory requirements in the Cayman Islands, which result in significant overlap with the substance requirements, it is expected that relevant entities licensed to carry on banking business...will already generally be operating in the

Does a holding company satisfy the ES test?

A holding company will satisfy the ES Test if it (a) has complied with all applicable filing requirements under the Companies Act and (b) has adequate human resources and adequate premises in the Cayman Islands for holding and managing equity participations in other entities.