Cayman Islands funds and regulatory update Q4 2025

Companies (Amendment) Act, 2024 (Commencement) Order 

The Companies (Amendment) Act, 2024 will be brought into force on 1 January 2026. Further detail on the amendments is available in our briefing, Key changes introduced by the Companies (Amendment) Act, 2024, which includes, among other things:

• a process to reduce share capital without needing court approval in certain circumstances
• the ability for a foreign body corporate with limited liability and without a share capital to continue (migrate) into the Cayman Islands
• the option to re-register a Cayman Islands exempted company as an ordinary resident company
• conversion mechanisms for a limited liability company (LLC) to an exempted company and for a foundation company to an exempted company

Regulations for Crypto Asset Reporting Framework and CRS amendments introduced

From 1 January 2026, updates to the Common Reporting Standard (CRS) regime in the Cayman Islands will take effect, with certain provisions applying in 2027, following the implementation of:

• the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) (Amendment) Regulations (the CRS Amendment Regulations), which amend the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) Regulations (2021 Revision)
• the Tax Information Authority (International Tax Compliance) (Crypto Asset Reporting Framework) Regulations, 2025 (the CARF Regulations)

The CRS Amendment Regulations and CARF Regulations:

• introduce a requirement for a Cayman Financial Institution to appoint a person in the Cayman Islands as its principal point of contact (PPoC)
• introduce new registration, reporting and compliance deadlines
• tighten penalty and enforcement mechanics
• extend the scope of CRS to include certain categories of digital assets
• align Cayman’s regime with the OECD’s updated CRS and Crypto Asset Reporting Framework (CARF) and impose additional obligations on entities dealing with crypto assets

These amendments have been introduced to align the Cayman Islands CRS regime with amendments to the CRS adopted by the OECD in August 2022 (CRS 2.0).

For further detail on the amendments to CRS and the introduction of the CARF Regulations, read our briefing on Amendments to Cayman Islands Common Reporting Standard Regulations.

Government fee changes affecting funds from 1 January 2026

Consolidated annual fees for mutual funds and private funds

With effect from 1 January 2026, the Cayman Islands government will introduce a revised fee model for mutual funds and private funds, moving to a single consolidated annual payment.

Under the current model, funds are required to pay:

• an annual registration/continuation fee at the start of the year
• a separate US$366 (CI$300) annual return fee mid-year

From 2026, these will be replaced by a single consolidated annual payment due at the start of the year. Within that consolidated amount:

• the annual return component will increase from US$366 (CI$300) to US$549 (CI$450)
• for alternative investment vehicles (AIVs) and sub-funds under the Private Funds Act, the annual return component will increase from US$183 (CI$150) to US$274 (CI$225)

This adjustment eliminates mid-year billing, simplifies compliance obligations and reduces duplicate payment cycles.

New annual fee for registered offices of exempted limited partnerships

From 2026, a new US$122 (CI$100) annual fee will apply to the registered office of each exempted limited partnership.

Beneficial ownership developments

The Beneficial Ownership Transparency (Amendment) (No. 2) Bill, 2025 was gazetted in early October 2025. It has not yet come into force, but key proposed changes include:

Required particulars for subsidiaries of listed entities

Where a legal person is a subsidiary of a listed entity, filings will need to include the name of the listed entity in addition to the stock exchange and jurisdiction details.

Notification and restrictions notice processes

The amendments clarify that:

• a legal person does not need to notify a beneficial owner of a relevant change if the beneficial owner has already been informed and the updated particulars have been obtained
• corporate services providers must issue a restrictions notice within 30 days if there is no compliance or valid explanation, but such a notice will not take effect over an interest that is already subject to a pre-existing security interest

Information sharing with foreign authorities

The Competent Authority is explicitly empowered to share beneficial ownership information with:

• foreign beneficial ownership authorities with similar functions
• foreign authorities responsible for combatting money laundering or terrorist financing
• other foreign governmental bodies in defined circumstances, including where the request relates to a potential or actual transaction with the Cayman legal person

Public access

The scope of public access to beneficial ownership information is refined. In addition, the Competent Authority may provide a registrable beneficial owner with information on the search platform that relates to that registrable beneficial owner.

Administrative fines and Registrar rules

The rules issued by the Registrar regarding fines are amended to specify the factors that will be taken into account for initial assessments and for final assessments, including aggravating and mitigating factors.

New annual FRA sanctions reporting obligation

On 6 November 2025, the Financial Reporting Authority announced a new annual reporting requirement for entities holding frozen assets linked to designated persons under UK sanctions, with a filing deadline of 30 November 2025.

Those entities that filed on 30 November must ensure annual reports are filed each year under the new reporting regime. See our client briefing, Cayman FRA sanctions reporting due 30 November, for further information or to discuss how the new reporting obligation may affect your structures with your usual Ogier attorney.

Virtual assets and tokenised funds

The Virtual Asset (Service Providers) (Amendment) Act, 2025 (VASP Amendment Act), gazetted on 23 July 2025 (commencement date to be confirmed), will revise the definition of “issuance of virtual assets” so that it excludes:

• the sale of virtual service tokens
• the issuance of equity interests as defined under the Mutual Funds Act (Revised) and the Securities Investment Business Act (Revised)
• the issuance of investment interests under the Private Funds Act (Revised)

This is intended to remove ambiguity as to whether Cayman funds issuing tokenised interests (that is, equity or investment interests recorded on a blockchain or similar technology) are, purely because of tokenisation, also conducting a separate “issuance of virtual assets” regulated activity under the Cayman Islands VASP Act, in addition to being regulated as funds.

The amendments will also have retrospective effect for tokenisations of equity or investment interests that occurred before the VASP Amendment Act comes into force, which should give additional comfort to existing tokenised fund structures.

On 26 August 2025, the Ministry of Financial Services launched a consultation on proposals to amend the Mutual Funds Act, Private Funds Act and VASP Act to introduce a dedicated framework for tokenised funds. The consultation closed on 12 September 2025 and any legislative changes will be developed in light of the feedback received.

How Ogier can help

For advice regarding any fund or regulatory matters, please contact your usual Ogier attorney or any of our key contacts listed below.