Follow Up on the Cayman Economic Substance Requirements

Further to our Newsletter of 28 January 2019 on the Cayman Economic Substance requirements (“ES Requirements”), we inform that the final version of the Guidance Notes was issued on 22 February 2019.

You may download a copy of the Guidance Notes here.

We note that Investment Funds, entities tax resident outside the Islands and Domestic entities do not come within the meaning of “Relevant Entities” and therefore are not required to comply with the ES Requirements.

Entities tax resident outside the Islands will be required to substantiate such claims by producing satisfactory evidence such as a Tax Identification Number, Tax Residence Certificate and assessment or payment of a tax liability.

Pure Equity Holding Companies (means a company that only holds equity participations in other entities and only earns dividend and capital gains) are subject to a reduced ES requirements and in this respect, it will be considered as having met the ES requirements if:-

1. It has complied with all applicable filing requirements under the Companies Law (2018 Revision); and
2. It has adequate human resources and adequate premises in the Islands for holding and managing equity participation in other entities.

What amounts to adequate human resources and adequate premises is not as yet entirely clear although “Adequate” in the Guidelines has the meaning of “suitable or fitting for a particular purpose, person, occasion”. Whether a relevant entity has adequate human resources and premise is ultimately dependent on facts of the relevant entity and its business activity and it will be the responsibility of the relevant entity to ensure it maintains and retains appropriate records to demonstrate the adequacy of the resources.

The Guidelines provide that a relevant entity may outsource either some or all of its activity to its service provider but must be able to demonstrate that it has adequate supervision over the outsourced activity. The guidelines clearly state that there must be no “double counting” in this regard.

Portcullis is currently seeking advice to clarify how the ES requirements may be met for Pure Equity Holding companies. In the interim, we strongly advise entities to identify its activities and determine if they fall within the definition of “Relevant Entity”. If so, the relevant entity needs to consider how it will meet the ES requirements. Entities are also advised to take note of the notification and reporting requirements outlined on pages 26 and 27. Please do not hesitate to approach us should you require assistance with preparation of accounts.

Portcullis are working towards assisting you with compliance of the requirements.

Please do not hesitate to contact your relationship manager should you require further information.

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跟進開曼群島經濟實質規定

繼2019年1月28日，本公司發布有關開曼群島經濟實質規定（下稱「經濟實質規定」）之時事通訊之後，在此進一步通知，最終版的引導說明已於2019年2月22日頒布。

您可在此下載一份引導說明。

應注意的是，投資基金、開曼境外稅務居民實體及國內實體不屬於「相關實體」的定義範圍，因此無須遵守經濟實質規定。

開曼境外稅務居民實體必須提出合規證據，如稅籍編號、稅務居民證書、評估稅或納稅證明等，茲證明其所宣稱開曼境外稅務居民身分。

純股權控股公司（指僅持有其他實體股權且僅賺取股利及資本利得的公司）必須遵守較寬鬆的經濟實質規定，在下列情形下，純股權控股公司即被視為已遵守經濟實質規定：-

該公司已遵守公司法（2018年修訂版）的所有歸檔規定要求；以及該公司在開曼群島擁有足夠的人力資源及足夠的營業場所，使其得以持有及管
理對其他實體的股權投資。

所謂「足夠的人力資源及足夠的營業場所」是指多少數量，目前尚不完全明確，然而，「足夠的」一詞在經濟實質細則中定義為「適合或符合特定目的、人、情況。」相關實體是否擁有足夠的人力資源及營業場所，最終取決於該相關實體與其業務活動的事實，且相關實體有責任，確實保留及留存適當記錄證明資源的足夠性。

依據經濟實質細則規定，相關實體得外包其若干或全部業務予服務提供商，但必須能夠證明其對外包業務有足夠監督。經濟實質細則明確規定，在此外包服務不得有「重覆提供」的情形。

保得利公司目前正在諮詢專家意見，以便說明純股權控股公司如何遵守經濟實質規定。在此期間，本公司強烈建議各實體確認其業務活動，並判斷其是否屬於相關實體的定義範圍。若是，則該相關實體必須思考如何遵守經濟實質規定。本公司亦建議各實體注意第26及27頁所概述的「通知與申報」規定。倘 貴公司需要編製會計帳目方面的協助，請不吝與本公司聯繫。

保得利公司一向致力於協助您遵守各項規定。

倘您需要進一步資訊，請洽詢您的關係經理（Relationship Manager）。