From 1 January 2019, new legislation came into effect in the
Cayman Islands, requiring in-scope entities that carry on
particular activities to have demonstrable economic substance in
Cayman.
The International Tax Co-operation (Economic Substance) Law
(Law), 2018 was enacted after an extensive process
of consultation with the EU Code of Conduct Group, the OECD and
Cayman stakeholders.
The Law is the latest in a series of steps by Cayman to meet its
2017 commitment as an Inclusive Framework member under the
OECD's global Base Erosion and Profit Shifting (BEPS)
initiative, and corresponding EU requirements encompassing no or
nominal tax jurisdictions. Other international financial centres
such as the British Virgin Islands, Guernsey, Jersey, the Isle of
Man and Bermuda have implemented similar legislation.
