Special Economic Zones Act (2023 Revision)

Summary

This is the official 2023 Revision (consolidated as at 31 December 2022) of the Special Economic Zones Act, the Cayman Islands law establishing the Special Economic Zone Authority and the regulatory regime for special economic zones such as Cayman Enterprise City. It sets out the Authority's establishment, membership, functions and powers, the process for declaring a special economic zone and a developer, and the trade certificate system that businesses must use to operate within a zone. The Act also contains AML/CFT-related information-sharing duties between the Authority and Supervisory/competent authorities, enforcement powers (including search warrants and trade officer powers), and schedules setting out tax and duty benefits available to the developer and to special economic zone enterprises located in Cayman Enterprise City.

Who the Act Applies To

• Special Economic Zone Authority: The Act applies to the Authority itself.
• Developers: Developers of special economic zones are covered.
• Businesses: Businesses (special economic zone enterprises) seeking to carry on business within a declared zone are covered, along with their partners, directors, officers, employees and beneficial owners/controllers, who are subject to due diligence and disclosure requirements.
• Supervisory and competent authorities: Supervisory Authorities and competent authorities (as defined by reference to the Proceeds of Crime Act) are also touched, as AML/CFT/CPF information may be shared with them.

Substantive Requirements

• Trade certificate: Businesses must hold a valid trade certificate to operate in a zone.
• Conditions and fees: The Act imposes conditions and annual fees on certificate holders.
• Transfer restrictions: Transfer or assignment of certificates is prohibited.
• Notification duties: Certificate holders must notify the Authority of address changes and material changes.
• Suspension or revocation: The Authority has power to suspend or revoke certificates for non-compliance with the Act, the Anti-Money Laundering Regulations, or other Cayman Islands law.

Because large portions of the operative sections (Parts 5 and 6, covering trade certificate application, annual return and enforcement details) were not fully visible in the extracted text, some specific procedural details could not be independently verified from the text reviewed.

Key obligations

• A person must hold a valid trade certificate issued under section 17 to carry on business as a special economic zone enterprise (section 13).
• Trade certificate holders must pay the prescribed annual fee to maintain validity of their certificate (section 22).
• Trade certificate holders must notify the Authority of changes of address and other specified changes (section 24) and of material changes (section 24A).
• Trade certificates may not be transferred or assigned (section 21).
• Trade certificate holders must file an annual return (section 29C).
• The Authority must, on written request from a Supervisory Authority or competent authority, share information required for anti-money laundering, counter-terrorist financing or counter-proliferation financing purposes (section 5(3)).
• Recipients of information shared by the Authority under section 5 must use it only for the purpose provided, retain it only as long as necessary, not disclose it without the Authority's prior consent, and provide written confirmation of these restrictions unless already bound by statutory confidentiality duties (section 5(5)).
• The Authority may suspend or revoke a trade certificate where the enterprise contravenes the Act, the Anti-Money Laundering Regulations, or other applicable law (section 5(1)(j) and section 26).
• The Authority must prescribe and enforce due diligence requirements and investigations concerning partners, directors and beneficial owners of special economic zone enterprises (section 5(1)(l)).

Applies to

Special Economic Zone Authority, special economic zone developers, special economic zone enterprises (trade certificate holders), businesses operating in a special economic zone, partners, directors, officers and employees of special economic zone enterprises, beneficial owners/controllers of special economic zone enterprises, Supervisory Authorities and competent authorities (for AML/CFT/CPF information sharing)

Deadlines

• fifth anniversary of the date on which the certificate of occupancy is issued (for the final building comprising at least 150,000 sq. ft. leased built area in Cayman Enterprise City): Customs/import duty exemption on individual consumables worth less than US$5,000 imported into the zone ceases to apply after this date, per Schedule 3.

Related documents

• Special Economic Zones (Cayman Enterprise City) Order, 2024 (SL 14 of 2024) commences this document
• Special Economic Zones (Cayman Enterprise City) Order, 2024 (SL 14 of 2024) is made under this document