A private trust company ("PTC") registration with the Cayman Islands Monetary Authority ("CIMA") enables a Cayman Islands company, which might otherwise be required to obtain a trust license, to avoid the need to do so. The process is a "fast track" procedure permitted in certain specified circumstances set out in the Banks and Trust Companies Law Private Trust Companies Regulations (2020 Revision) (the "PTCR"), as originally promulgated in 2008.
Registration as a PTC
Under the PTCR:
"A company that is a [PTC] and is registered under paragraph (2), does not require a licence to carry on connected trust business".
Under paragraph 2 of the PTCR a private trust company means a trust company which:
- Is incorporated in the Cayman Islands; and
- Conducts no trust business other than "connected trust business".
Connected trust business
Connected trust business means trust business in respect of trusts of which there is just one contributor or, if more than one, they are all "connected persons".
A person is a connected person in relation to another person if:
- They are in a relationship listed in the Schedule to the PTCR;
- One is contributing to the funds of a trust as the trustee of a trust of which the other is contributor;
- Each is in a group of companies; or
- One is a company and the other is a beneficial owner of shares or other ownership interests of that company or of any other company in the same group of companies.
The Schedule lists the following as connected persons:
- The descendants of the individual and their spouses;
- Parents, including step-parents;
- Parents-in-law, including step-parents-in-law;
- Brother, step-brother, sister, step-sister and their spouses;
- Spouse's grandparents;
- Spouse's brother, step-brother, sister, step-sister and their spouses and children;
- Parent's brother, step-brother, sister, step-sister and their spouses;
- Children of the brother, step-brother, sister or step-sister of the individual's parents, both present and future, including step-children, and their spouses; and
- Children of the individual's brother, step-brother, sister or step-sister, both present and future, including step-children, and their spouses.
- For any of the relationships listed above that may be established by blood, that same relationship may also be established by adoption.
- The term "descendants of the individual" means the individual's children, the children of his children, the children of those children, and so on.
- The term "children" includes step-children.
Group of companies
Group of companies has the same meaning as under the Securities Investment Business Law (2020 Revision) such that a group of companies will comprise:
"... every company which, directly or indirectly, is a subsidiary [as widely defined'] of the same holding company, and such a group includes the holding company".
The PTCR also specifies certain requirements in respect of PTCs:
- A PTC must maintain its registered office at the office of a company that holds a trust licence under the BTCL and have at least one director who is a natural person.
- In relation to each relevant trust, up to date copies of the trust deed or other document containing or recording the trust, its powers and provisions, the name and address of the trustee, any contributor, any beneficiary to whom a distribution is made, any deed or other document varying the trust, its powers or provisions and all financial and transactional records of the PTC and the trust must be kept at such registered office.
- A PTC is required to register with
CIMA and, in order to be registered, must, at the time of
registration and on or before the 31st day of January every year
thereafter during the continuation of the registration:-
- File with CIMA an annual declaration,
in such form as CIMA may approve, declaring:
- The name of the PTC;
- The names and addresses of the directors of the PTC;
- The names and addresses of the shareholders or members of the PTC;
- The name of the holder of the trust licence providing the registered office of the PTC or the address of the PTC's place of business, as the case may be;
- That the company is a PTC to which the PTC apply; and
- That the PTC is in compliance with the requirements of the PTCR;
- File with CIMA proof of the identification of the directors and shareholders of the PTC; and
- Pay to CIMA an initial registration fee of CI$3,500 (approximately US$4,270) and thereafter an annual registration fee of CI$3,500.
- If there is any change in the information provided, the PTC must, within thirty days, inform CIMA.
- File with CIMA an annual declaration, in such form as CIMA may approve, declaring:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.