Indigo Bay Development Ltd, which builds condos on the South Sound, operates under LCCL (via social media).

(CNS): The Department of Commerce and Investment (DCI) has announced new requirements for foreign investors to apply for a local company management license. Advertisements for local partners must be placed on DCI’s website and print media. Officials said the aim was to put these opportunities in front of a wider audience and encourage Caymanis to become more involved in the country’s economic success. You can see all business proposals. one placeHowever, in most cases, applicants are asking for large cash injections, a barrier to local involvement.

“Our aim is to ensure that news of these investment opportunities reaches the widest possible audience, and we are committed to exploring various avenues to achieve this,” said Trade and Business Licensing Commission Chairman Garth Arch said.

The granting of the LCCL is a controversial issue as the decision-making process remains opaque as the Cabinet makes final decisions behind closed doors. This happens after the TBL board inspects these applications. closed door. The licensing process has triggered allegations of ‘fronting’ by foreign investors opening proposed businesses in Caymanian names only. Local “partners” are paid a fee in exchange for their name appearing on company documents, but have little or no actual involvement in the business.

As of September 30, Recorded 251 LCCLs at DCI. Officials confirmed that the majority of owners are real estate affiliates set up for leasing commercial buildings, providing tourist accommodation, or for development projects. Financial services and healthcare providers also form a large number of companies that now operate here without Cayman partners.

However, there are some surprising exceptions, such as spas and goat farms. The current list also shows that a controversial company was set up to develop a cruise berth proposed by the previous government. Verdant Isle Port Partnersstill holds a valid license.

A DCI official told CNS that the board has the power to include various requirements it deems necessary, such as the duration of the license, depending on the nature of the proposed business. However, nothing prohibits certain types of businesses covered by the LCCL.

“All applications are scrutinized and Local Company Management Act (2019)“If an applicant believes it can meet the ‘exceptional circumstances in the public interest’ requirement, the applicant may request it,” the DCI said in response to a CNS question. I can.
Cabinet will consider waiving requirement for participation of Caymanians. ”

The DCI, acting as the Secretariat of the Trade and Business Licensing Board, conducts a due diligence review of all applications, the results of which, along with other criteria prescribed by law, are communicated to the Board’s consideration. person said.

“If the Board determines that there are merits to a substantive application and requests the Cabinet to consider waiving the Caymanian participation requirement, the Cabinet may provide an “exceptional “The circumstances are not compelling enough to justify granting the waiver, considering the evidence of the circumstances,” DCI explained.

The board is also responsible for ensuring that the granted LCCL complies with its terms.

“The board has the power to revoke licenses and impose penalties, including fines and imprisonment, if found to have violated the law,” the spokesperson said. “During the term of the licence, the board of directors may require the company to furnish additional information about its business as it deems necessary, summon and have the directors appear before it, and have the right to exercise discretion over the shares of such company. A Caymanian who claims to be the beneficial owner may also be required to provide evidence.”

Applicants must always advertise with DCI to demonstrate their efforts to find local partners, but with the new measures, regulations require advertising on the DCI portal and in print at the start of the application process. media.

Commerce Minister Andre Ebanks said the new measures are in line with the government’s policy commitment to help Caymanians play a more active role in the country’s success.

“We encourage potential investors in Cayman who see these opportunities advertised on their website and in the media to respond to the company and copy their expression of interest to the board.” eBanks said in relation to the new requirements.

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