Recent Regulatory Changes for Cayman Islands Exempted Companies: 2024–2026

Overview

The Cayman Islands has enacted significant legislative reforms affecting exempted companies during 2024–2026. Changes address the BOSS register replacement, VASP regulation, AML/CFT framework updates, and the OECD crypto-asset reporting framework.

1. Companies (Amendment) Act 2024 — BOSS Replacement (January 2026)

The Beneficial Ownership (Sharing and Safeguarding) Act 2024, operative from January 2026, replaced the prior BOSS (Beneficial Ownership Security System) register with the VIRRGIN system. All beneficial ownership information is now held in a central government register. The BO threshold remains at more than 25% ownership or control. Companies must file BO information within 30 days of incorporation and update within 15 days of any change. The VIRRGIN system is accessible to CIMA, law enforcement, and foreign competent authorities under international information exchange agreements.

2. BOTA Cascade — Four Instruments

Four subordinate instruments under the Beneficial Ownership Transparency Act (BOTA), gazetted in late 2024, set the detailed operational rules for the VIRRGIN system, specifying required information, verification standards for licensed fiduciary agents, sanctions for non-compliance (up to USD 100,000), and request and disclosure procedures.

3. POCA DAML Reform (January 2025)

An amendment to the Proceeds of Crime Act (POCA), in force January 2025, reformed the Defence Against Money Laundering (DAML) regime. Reporting entities may submit a DAML request to the Financial Reporting Authority (FRA) before completing a transaction of concern. The FRA has 7 days to provide or withhold consent; if no response is given, implied consent applies.

4. VASP Phase Two (April 2025)

Phase Two of the VASP regime, effective April 2025, extended mandatory registration to DeFi platform operators and non-custodial wallet service providers meeting CIMA activity thresholds. Companies operating without registration are subject to civil penalties and potential CIMA-directed wind-up.

5. AEOI — CRS 2.0 and CARF (January 2026)

The Cayman Islands activated CARF and CRS 2.0 from 1 January 2026. Exempted companies that are Crypto-Asset Service Providers must register as Reporting CAEs and file annual CARF reports.

Summary of Key Legislative Instruments