Cayman Islands Update – Q4 2025

The Cayman Islands Department of International Tax Cooperation (DITC) has announced significant amendments to the Common Reporting Standard (CRS) Regulations, effective January 1, 2026, and January 1, 2027. These changes represent business-critical compliance shifts for Financial Institutions and crypto asset service providers.

Key updates include:

• Accelerated registration deadlines (moving to January 31 annually from 2026)
• A new filing deadline of June 30 for CRS returns and Compliance Forms (starting in 2027 for the 2026 reporting period)
• An expanded definition of Financial Assets to include certain crypto assets, electronic money products, and central bank digital currencies.

Furthermore, a notable governance shift involves the Principal Point of Contact (PPoC), who must now be a resident of the Cayman Islands. This requirement eliminates the option for non-resident appointments; entities registered before January 1, 2026, without a local PPoC must appoint a Cayman resident and submit a change form by January 31, 2027.

For a detailed breakdown of these amendments and their impact on your compliance obligations, please read the full article here.

Non-CIMA Registered Funds

In order to avoid 2026 annual Cayman Islands’ Registrar of Companies fees, a Voluntary Liquidator would need to have held the fund’s final general meeting before 31 January 2026. For a limited partnership, the final dissolution notice must be filed by this date.

CIMA Registered Funds

A full de-registration request should be submitted to CIMA by 1 December and must be approved by 31 December 2025 to avoid the 2026 annual license fee. The fund must be in good standing with CIMA before de-registration (i.e., must have paid all prescribed fees, submitted all the required audited financial statements, and have no outstanding queries or regulatory filings due to CIMA). Noting that funds that submit de-registration filings late in December may risk CIMA not approving the de-registration prior to 31 December 2025, therefore due to pay the full 2026 annual CIMA fee. There is no pro-rata option for annual fees.

Strike Off

The strike off is the most cost-effective method of dissolution and is generally only appropriate for an entity which has not engaged in any substantial business activity or has been dormant for a considerable length of time. A strike off request should be submitted to the Cayman Islands Registrar of Companies by 31 December to avoid the annual fees.

Waystone’s Liquidations Team is comprised of experienced professionals who are fully supported by our in-house fund governance specialists. We act as an Independent Voluntary Liquidator and prepare all statutory documentation. Our team has expert knowledge of the CIMA regulatory framework and provides step-by-step management and guidance throughout the process, minimising the length of time from the initial announcement of the intention to wind-up, until the fund is de-registered with CIMA and formally dissolved.

To find out more about Waystone’s dissolution services, please reach out to us at: [email protected].

Modern family offices have evolved into sophisticated, multi‑service organisations that go far beyond traditional wealth preservation. They now manage complex investment strategies, regulatory compliance, succession planning, and operational scaling, all while safeguarding family values across generations. With growing exposure to alternative assets and heightened oversight requirements, governance has become central to ensuring transparency, risk management, and long‑term success.

In this article, Julianne Recine, Independent Director at Waystone, outlines how family offices can benefit from outsourcing governance and operational oversight to specialised firms. Establishing robust governance frameworks, using technology responsibly, and engaging independent expertise enables family offices to institutionalise operations, mitigate risks, and preserve wealth. Firms such as Waystone provide governance professionals who deliver independent oversight and advisory services, helping family offices strengthen compliance, improve reporting, and align with best practices.

To find out more, visit here.

Regulatory Outlook

CIMA continues to reinforce its supervisory approach under the SIBA. For Registered Persons, the expectation remains clear: governance and internal control frameworks must be documented, risk-based, and proportionate to the nature, size, and complexity of the business.

Key Regulatory Measures Impacting Registered Persons:

• Corporate Governance Rule – Requires documented governance arrangements tailored to the entity’s operations.
• Internal Controls Rule and Statement of Guidance (SOG) – Mandates effective internal control systems, including risk identification, monitoring, and reporting.
• Outsourcing SOG – Requires risk assessments, materiality evaluations, and due diligence for outsourced functions.
• Cyber security Rule and SOG – Establishes minimum standards for information security.
• AML/CFT/CPF Obligations – Reinforces compliance with Anti-Money Laundering Regulations and Guidance Notes.

Looking Ahead: 2026 and Beyond

CIMA is expected to intensify scrutiny and inspections in 2026 as part of its risk-based supervisory program and in preparation for the 2027 FATF mutual evaluation. This means Registered Persons should anticipate:

• Increased on-site inspections and off-site monitoring
• Greater emphasis on documented governance frameworks and internal control registers
• Evidence of risk-based oversight of outsourcing arrangements.

Waystone’s Response: Governance & Controls Support for Registered Persons

To help Registered Persons meet these obligations, Waystone has launched the Registered Person Governance and Controls Support Services, designed specifically to align with CIMA’s Rules and SOGs.

Core Components

• Corporate Governance Framework
  Providing, for review and alteration by the Registered Person, draft template governance documents, addressing the Registered Person’s approach to compliance with the Rules and SOGs referred to above.
• Internal Controls Documentation
  Establish and update control registers based on the Internal Controls Rule and SOG.
• Outsourcing Oversight
  Perform materiality and risk assessments, maintain outsourcing logs, and conduct due diligence reviews.
• AML/CFT/CPF Controls Review
  Assess policies, training, and suspicious activity reporting against AML Regulations and Guidance Notes.
• Regulatory Inspection Support
  Collate and provide Relevant Control Documents for CIMA inspections.

Key Benefit

Our approach will assist Registered Persons to review and consider if their governance and internal controls are risk-based and proportionate, reflecting the nature, size, and complexity of each Registered Person’s operations.

Next Steps

We encourage Registered Persons to engage early for 2026 compliance planning.
For more information, please contact your usual Waystone representative or Lyndon John ([email protected]) or visit www.waystone.com.

Proposed amendments to SIBA were circulated to the industry for consultation.

These proposed amendments include:

• Annual audit required for Registered Persons
• CIMA pre-approval of directors
• Pre-approval required for any change of directors or auditors
• No issuance or transfer of shares in a Registered Person until SIBA registration is approved by CIMA.

These requirements are already imposed on SIBA licensees and derive from CIMA’s assessment of the Securities Investments Business sector against the International Organisation of Securities Commissions Objectives (IOSCO) and Principles of Securities Regulation.

FATF Mutual Evaluation (2027)
The Cayman Islands will undergo its next FATF/CFATF mutual evaluation in late 2027, with preparatory work already underway. The review will focus on the effectiveness of the jurisdiction’s AML/CFT framework rather than just technical compliance. In anticipation, CIMA has increased supervisory reviews across sectors. While the evaluation targets the jurisdiction as a whole, entities should ensure their AML documentation, oversight records, and evidence of monitoring remain up to date.

National Risk Assessment and OSAIF
The Cayman Islands has launched its 2025–2026 National Risk Assessment (the “NRA”), a two-year initiative aimed at strengthening its anti-money laundering, counter-terrorist financing, and counter-proliferation financing (AML/CFT/CPF) framework. The NRA assists the jurisdiction’s preparations for the 5th Round Caribbean Financial Action Task Force (CFATF) Mutual Evaluation, scheduled to begin in 2027. The NRA also reinforces the Cayman Islands’ reputation as a global leader in financial services. The NRA will be overseen by the newly established Office for Strategic Action on Illicit Finance (OSAIF), a centralised authority that reinforces the jurisdiction’s alignment with international standards, particularly those of the Financial Action Task Force (FATF).

OFSI Sanctions List Transition (Effective 28 January 2026)
The UK’s Office of Financial Sanctions Implementation (OFSI) has announced that its Consolidated List of Asset Freeze Targets will be discontinued from 09:00 GMT on 28 January 2026. After that date, the UK Sanctions List (UKSL) will become the sole official source of sanctions designations. Administrators and screening vendors must ensure systems transition to the UKSL before that date to avoid gaps in sanctions screening coverage.

FRA Frozen-Assets Reporting Notice (Due 30 November 2025)
The Cayman Islands Financial Reporting Authority (FRA) has issued its annual Frozen Assets Reporting Notice. Entities that hold or control assets belonging to UK-designated persons must report these to the FRA using the prescribed form. Reports must reflect asset positions as at 30 September 2025 and be submitted by 30 November 2025. If no such assets are held, no return is required.

DITC announced the launch of its new portal for Country-by-Country Reporting (CbCR), effective 29 August 2025. The previous CBCR-specific portal was taken offline. This means that all Multinational Enterprise (MNE) Groups with Cayman Islands Constituent Entities (CEs) must reregister with the Tax Information Authority (TIA) via the DITC Portal by 30 November 2025.

The Virtual Asset (Service Providers) (Amendment) Act, 2025 (the “VASP Amendment Act”)
The VASP Amendment Act has been passed (June 2025); however, it is not yet in force, pending a date appointed by cabinet order. The key takeaways from this amendment Act are that the sale of virtual service tokens or the issuance of an equity interest as defined under the Mutual Funds Act (as revised) (the “MFA”) and the Securities Investment Business Act (as revised), or an investment interest as defined under the Private Funds Act (as revised) (the “PFA”), do not comprise the issue of virtual assets.

Industry Consultations
The Ministry of Financial Services and Commerce has released consultation drafts of Amendments to the MFA and the PFA to introduce tokenised funds – on which the industry is consulting.

CIMA Supervisory Circular
CIMA has issued a supervisory circular to help financial service providers, particularly VASPs strengthen their anti-money laundering (“AML”), countering the financing of terrorism (“CFT”), and sanctions compliance programmes. The circular highlights CIMA’s risk-based approach to supervising VASPs under the Virtual Asset (Service Providers) Act and notes key findings. Key findings include deficiencies in risk assessments, technology testing, customer due diligence, ongoing monitoring, sanctions compliance, board oversight, outsourcing arrangements, independent audits, employee training, and record-keeping. CIMA emphasises the need for robust policies, effective oversight, and timely remediation of identified gaps. CIMA also uses data analytics and transaction sampling to monitor compliance and identify emerging risks, reinforcing its commitment to maintaining high AML/CFT standards in the Cayman Islands’ virtual asset sector.

Updates to VASP Application Form
CIMA issued an Industry Notice on 14 July 2025 advising that the Virtual Asset Service Providers (VASPs) application form has been updated on the REEFS portal. The amendments further streamline the application process for registration, licensing and waivers by incorporating additional questions and clarifying document requirements for all applicants. All VASP applications submitted on or after 14 July 2025 must be completed using the updated APP 101-84-05 form via the REEFS portal. A Completion Guide is available to assist with the VASP application process.

The Ministry of Financial Services and Commerce has released a second round of proposed amendments to the Beneficial Ownership Transparency Regulations.

The draft Beneficial Ownership Transparency (Amendment) (No. 2) Regulations, 2025, build on earlier changes to the framework enacted since approval of the Beneficial Ownership Transparency Act in December 2023. The ministry said the latest revisions aim to maintain compliance with evolving international standards and to clarify how transparency requirements apply across different types of legal entities.

Key proposed updates include

• Consolidating definitions of voting rights
• Removing or providing clarity on certain legal references to ownership via “legal entities” versus “legal persons”
• Updating discrepancy-reporting provisions in line with international standards.

The Economic Substance Return (ESR) filing deadline for entities with a 2024 financial year-end is 31 December 2025. Our Economic Substance team is actively working to ensure all returns are prepared and submitted well ahead of the regulatory deadline with the DITC.

The Cayman Islands Government has announced upcoming changes to select regulatory fees and the introduction of new levies. These updates are designed to enhance fairness, align with global regulatory standards, and improve operational efficiency across the financial services sector.

Key Changes

1. Mutual and Private Fund Fees
On 7 November 2025, the Ministry of Financial Services & Commerce announced that Government had approved changes to CIMA’s Annual Fees for Mutual Funds and Private Funds, noting that to streamline fee collection the Fund Annual Return (“FAR”) Fee would be consolidated into the Annual Fee, with an increase in the FAR Fee as set out below. We await further guidance from CIMA on timing and implementation of these changes.

• Fund Annual Return Fee:
       — Main funds – $450
       — Sub-funds – $225

• Base annual fee: Unchanged

2. New Fee – Exempted Limited Partnership (ELP) Registered Offices
Effective January 2026, a CI$100 annual fee per ELP will be payable to CIMA.

3. Class B Insurer Fees
A 10% increase in Class B insurer fees takes effect in 2026:

BVI

The BVI Financial Services Commision’s transitional grace period for first-time company financial annual Returns ended on 30 June 2025. Going forward, BVI companies must file the annual return with their registered agent within nine (9) months of each financial year-end (e.g., for companies with a 31 December 2024 year-end, the annual return must be filed by 30 September 2025).

The British Virgin Islands Limited Partnership (Amendment) Act, 2024 was brought into force on 2 January 2025, implementing a series of amendments to the Limited Partnership Act of 2017. This included a requirement for BVI limited partnerships to file an annual financial return (similar to the obligations for BVI companies). The filing obligation will commence from 1 January 2026 and the returns are due within nine (9) months of financial year-end (e.g., for limited partnerships with a 31 December 2025 year end, the annual return must be filed by 30 September 2026).

Coordinated Sanctions on Russia’s Oil Giants

In October 2025, the United States (US), United Kingdom (UK), and European Union (EU) implemented coordinated sanctions against Russia’s two largest oil companies – Rosneft Oil Company and Lukoil Oil Company – significantly tightening restrictions on Russia’s energy sector.

The coordinated sanctions regime signals a shift in the risk landscape for asset managers and foreign financial institutions engaged with the Russian energy sector. Across all three regimes, the space for lawful engagement is now very narrow, with limited licenses or exceptions available.

Asset managers, financial institutions, and any firms with exposure to Rosneft and Lukoil, particularly those with a US, UK, or EU nexus should assess their exposure and act quickly. Two US general licenses expired on November 21, 2025, with additional general licenses expiring on December 13, 2025, and April 29, 2026; UK wind-down licenses end November 28, 2025. Such firms with any questions about complying with these sanctions must consult with their lawyers.