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Following a lengthy period of consultation, both with members of the public and industry stakeholders, the Cayman Islands Government recently passed the Non-Profit Organisations Law, 2017 (“the Law”). The Law is an entirely new development for the Cayman Islands (“Cayman”): up until this point, the jurisdiction did not have any charities legislation or any laws otherwise governing the formal registration and record-keeping of non-profit organisations (“NPOs”).
The introduction of the Law, which will come into force on 1 August 2017, is part of Cayman’s ongoing commitment to increased transparency and its contribution to the global fight against corruption, money-laundering and terrorism. In essence, it provides for the establishment of a registration system to deal with the regulation and monitoring of NPOs operating in Cayman and to provide, where appropriate, for the investigation into the operations of funds flowing through those NPOs.
A NPO is defined under the Law as including a company or body of persons, whether incorporated or unincorporated, or a trust:
This definition has a very wide scope, and it is obvious that it will capture a very significant number of NPOs throughout Cayman, regardless of their size and regardless of whether they have been established for minor short-term fundraising purposes or with a more wide-reaching and long-term charitable intent. Importantly, the only NPOs that are exempt from coverage under the Law are those which have a government entity as their principal regulator, or are established as a trust where the trusteeship of the trust includes a trust company licensed under the Banks and Trust Companies Law (2013 Revision).
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New Legislation for Non-Profit Organisations in the Cayman Islands