The Cayman Islands will reveal the names of corporate owners by 2023

The Cayman Islands is one of those jurisdictions that have more companies than residents. More specifically, the Cayman Islands has 1,5 companies per capita. This is lower than the British Virgin Islands (15,7 companies per capita), but higher than Bermuda (0,25 companies per capita).

The financial privacy provided by the Cayman Islands is one of the main reasons for attracting such a large number of companies. However, the tiny jurisdiction realised that financial privacy may bring not only investors but also “internal and external money laundering and terrorist financing threats.” To minimize those threats to the maximum possible extent, the Cayman Islands promised to make publicly available the identities of all owners of companies there by 2023.

The government of the Cayman Islands justified the introduction of public registers of beneficial ownership information as follows: “Financial secrecy is not tolerated in our jurisdiction. While the undue focus is often placed on our jurisdiction, we fully appreciate the need to ensure coherent and efficient registration and exchange of beneficial ownership information to facilitate the transparent flow of legitimate capital.

The introduction of beneficial ownership registers in one of the most widely known offshore jurisdictions (the Cayman Islands) is a clear sign that the era of offshore privacy is approaching its end. The reason is that most countries introduce or plan to introduce such registers. For example, Costa Rica, a jurisdiction widely known for ensuring the privacy of corporate shareholders, has recently created a Registry of Transparency and Ultimate Beneficial Owners. The failure to register is sanctioned with hefty fines.

In conclusion, the use of offshore companies to ensure financial privacy will soon be of little value. People who would like to protect their assets are advised to use limited liability structures in mid-shore jurisdictions that will not only limit their liability but also will reduce their tax burden in a legitimate and transparent manner. For example, corporate owners in Bulgaria will benefit not only from limited liability, a flat corporate tax of 10%, and affordable workforce but also from free access to the European single market.

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