Economic Substance Regime Overview

The International Tax Co-operation (Economic Substance) Act (2024 Revision) (the "ES Act") was brought into force to demonstrate the commitment of the Cayman Islands as a member of the Organization for Economic Co-operation and Development (the "OECD") and as a response to the work of the OECD and European Union on fair taxation and global standards.

The ES Act since being introduced has undergone various updates and is assisted by the Economic Substance Guidance Notes, Enforcement Substance Enforcement Guidelines and other Economic substance material to assist entities with their economic substance filings.

The ES Act applies to all entities registered and domiciled in the Cayman Islands. Economic Substance Practice Points (the "ES Practice Points") state that all entities, before the 31 January each year, must submit a completed economic substance notification (the "ESN") outlining the entity's economic substance position with respect to the ES Act.