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Cayman Islands banks need to be licensed under the Banks and Trust Companies Law 1995. Banking licenses are Class A, Class B restricted or Class B unrestricted: |
• Restricted Class B licenses require a paid-up capital of only US$25,000, but a list must be provided to the Inspector of Financial Services of the clients with which the bank intends to do business, and the list cannot change without further notification to the Inspector. Licensees do not need to be Cayman companies; but foreign licensees will probably have to provide a head office guarantee. All applications include considerable amounts of administrative and financial information.
Continuing supervision is exercised by the Monetary Authority. Quarterly returns and audited annual statements must be lodged. Share transfers, and changes to directors and officers must be authorized. Banks with unrestricted licenses are required to adhere to the Basle Convention Rules.
Banking confidentiality is well-established in Cayman through the common law, and is also enshrined both in the Banks and Trust Companies Law 1995 and in the Confidential Relationships (Preservation) Law 1995. Banking staff and government officials face civil and criminal sanctions if information is disclosed without authorization. A number of laws permit the enforcement of foreign judgments or the disclosure of information in response to a court order, but normally in the context of criminal activity and drug use or dealing.
Despite mutual assistance treaties, the Cayman Islands will not normally co-operate with fiscal investigations, and does not normally respond to requests for assistance on fiscal matters.
Source: www.lowtax.net
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