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As noted in our previous alert, the Non-Profit Organisations Law, 2017 (the “Law”) came into force on 1 August 2017. From that date, companies or bodies of persons meeting the definition of a “non-profit organisation” (“NPO”) under the Law had 12 months to formally register as such with the Cayman Islands Government (the “Government”). With the final deadline to register falling on 31 July 2018, NPOs are reminded to apply for registration as soon as possible in order to avoid penalties and fines.
By way of reminder, the definition of an NPO is very wide under the Law, and includes a company or body of persons, whether incorporated or unincorporated, or a trust:
This definition captures entities and groups of various sizes and purposes, and will also capture some companies licensed under Section 80 of the Companies Law. The latter is important because the Government has warned that Section 80 companies who meet the definition of an NPO but do not register under the Law by the deadline may be struck off the Companies Register.
The registration process is straightforward: template registration forms can be found in the Non-Profit Organisations (Registration Application) Regulations, 2017 (the “Regulations”), which were published on 26 May 2017, and the completed application can be filed via the Cayman Business Portal.
In terms of timing, the Government is encouraging applicants to submit their application by 1 July 2018 in order to allow for sufficient internal processing time ahead of the 31 July 2018 deadline. As a further incentive to have applications submitted sooner rather than later, the Government has confirmed that the CI$300 registration fee provided for in the Regulations will be waived for all organisations that apply for registration by 15 June 2018. NPOs that do not register and continue to operate as an NPO after the 31 July deadline will be exposed to financial penalties. A CI$500 penalty applies for non-compliance, with CI$10 added to the penalty for every day beyond 1 August 2018 that the NPO fails to apply for registration. The maximum penalty is capped at CI$2,500.
Following registration, the names of all NPOs are recorded on the Register of Non-Profit Organisations, which is publicly available and searchable as a means for persons to identify charities operating locally.
For further information about the application and registration process, please contact our Cayman Islands office.
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Deadline Looming to Register as a Non-Profit Organisation in the Cayman Islands