CAYMAN ISLANDS Law and Practice Contributed by: Daniel Lee, Sophia Scott, Kimberly Robinson and James Turner, Maples Group
5.5 Thin Capitalisation Rules and Other Limitations The Cayman Islands currently has no thin capitalisa - tion rules. 5.6 Transfer Pricing The Cayman Islands currently has no transfer pricing rules. 5.7 Anti-Evasion Rules Please refer to 5.1 Taxes Applicable to Employees/ Employers . Considering the various taxes that are not applicable in the Cayman Islands, the Cayman Islands also has no anti-evasion rules. 5.8 Tariffs The Cayman Islands does not have a tariff regime but Customs & Border Control (CBC) impose customs duties on certain imported goods to generate revenue. Those considering importing goods should consult CBC for current information. The Cayman Islands has merger control legislation for the following markets and sectors that are operat - ing and providing services within the Cayman Islands (together, the “Utilities Markets and Sectors”): • electricity markets, including the generation, trans - mission, distribution and supply of electricity; • fuels markets; • information and communications technology mar - kets, including broadcasting and content services; and • water sector, including the production, distribution, supply and treatment of water. The Utility Regulation and Competition Office (OfReg) was established pursuant to the Utility Regulation and Competition Act (As Revised) (URCA), with the responsibility to: • promote appropriate, effective and fair competition; 6. Competition Law 6.1 Merger Control Notification
• protect the short- and long-term interests of consumers in relation to utility services and in so doing: (a) supervise, monitor and regulate any service provider providing any of the referenced utility services; (b) ensure that utility services are satisfactory and efficient and that charges imposed in respect of utility services are reasonable and reflect ef - ficient costs of providing the services; and (c) publish information, reports and other docu - ments relating to utility services (ie, keep the public informed of the different utilities service providers); (d) promote innovation and facilitate economic and national development. 6.2 Merger Control Procedure The utilities service provider must notify OfReg prior to the merger, providing a transaction description and corporate and financial due diligence documents of the entities involved, including any beneficial owners holding 15% or more voting interest. To approve any merger transaction, OfReg must con - sider whether such merger transaction would have material adverse effects on the consumer and citizens of the Cayman Islands. If the merger transaction will not have a material adverse effect, OfReg is required under URCA to con - sent to the merger transaction. If the merger transaction would have adverse effects, OfReg has the option to: • declare the merger incompatible and deny consent; • give consent, subject to an order that certain con - ditions must be satisfied to avoid or eliminate such material adverse effects; or • give consent without issuing an order if OfReg is satisfied that the efficiencies put forward by the parties to the merger transaction outweigh any potential harm to consumers and citizens of the Cayman Islands.
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