Cayman’s beneficial ownership rules have changed significantly. Fund managers, general partners, and SPV operators must now reassess their structures in light of the Beneficial Ownership Transparency Act, 2023 (BOTA), which came into force in January 2025. At WB Group, we assist clients with practical compliance strategies that keep them aligned and ahead.
The Beneficial Ownership Transparency Act, 2023 (BOTA) marks a major shift in Cayman’s approach to transparency, with enforcement beginning in January 2025. BOTA tightens compliance requirements for Cayman funds, GPs and SPVs.
BOTA introduces stricter disclosure obligations, while eliminating many of the exemptions that investment entities previously relied on. If you operate a Cayman structure, now’s the time to get familiar and compliant.
Here’s what’s changed and why it matters.
What has changed under BOTA?
BOTA broadens the definition of entities in scope. Whereas the previous framework primarily targeted companies and LLCs, BOTA now includes:
- Companies incorporated under the Companies Act
- Limited Liability Companies (LLCs)
- Limited Liability Partnerships (LLPs)
- Exempted Limited Partnerships (ELPs)
- Foundation Companies
These changes significantly narrow the scope of exemptions that many funds, general partners, and carry vehicles historically relied on. Under BOTA, these entities must now report unless a limited exemption applies, and most do not. The Act also updates the definition of a beneficial owner to align with the Cayman AML Regulations. The regulation applies if you ultimately own or control 25% or more of an entity, or even if you exercise significant control over that entity. This includes individuals who may not hold equity but exercise control through shareholder agreements, veto rights, board appointment rights, or management contracts. This means that control rights (including those embedded in management agreements, shareholder arrangements or governance structures) could trigger disclosure obligations even without 25% equity ownership.
What do funds and managers need to do?
Under BOTA, if you’re an in-scope entity, you must:
- Identify your beneficial owners based on the 25% ownership or control test
- Maintain an internal beneficial ownership register
- Ensure this information is available to your licensed Corporate Services Provider (CSP) or designated Contact Person within 24 hours of a lawful request, as required by the Act.
If your fund previously relied on exemptions, such as those regulated under the Mutual Funds Act or Private Funds Act, then you are now required to reassess your status. This includes reviewing ownership and governance of entities such as:
- Investment fund vehicles
- General partners of exempted limited partnerships
- Management companies or SPVs involved in the fund structure
What’s the practical impact?
This is not just a procedural update, and the Registrar has indicated a more assertive enforcement approach: failure to comply may lead to penalties or reputational scrutiny.
For most institutional funds with standard governance models, compliance may be straightforward. However, if you have a more complex structure, particularly those with multiple layers, nominee arrangements or control rights held by individuals across different entities, you may require a more detailed assessment.
Non-compliance with BOTA can result in administrative fines and reputational risk. Entities must ensure their beneficial ownership records are complete, current, and accessible.
What should you do?
- Conduct a review of all Cayman entities within your structure
- Identify and document individuals who meet the beneficial ownership criteria
- Liaise with your CSP or legal advisors to ensure registration and reporting processes are in place
- Appoint a licensed Contact Person in Cayman, if applicable
- Confirm that a Contact Person has been formally appointed and is registered in accordance with BOTA. Enforcement started 1 January 2025, so it’s important you start now.
At WB Group, we help funds, managers, and investors navigate Cayman compliance with clarity. Our team advises on beneficial ownership rules, registration workflows, and entity structuring across your portfolio. If you’d like assistance with BOTA or any other regulatory change, we’d be happy to set up a call.