The Cayman Islands Legislative Assembly has approved several significant laws – essentially game-changers for anyone involved in the construction industry – and also seeking to give investment firms a competitive edge in the European Union.
Also during last week’s legislative meeting, a dedicated source of funds for road repairs was mandated for the Cayman Islands National Roads Authority.
Following is an overview of legislation awaiting Governor Helen Kilpatrick’s assent:
The Builders Law updates legislation from 2007 that was never brought into force following its passage in the Legislative Assembly.
The primary purpose of the law is to ensure proper qualifications and expertise of construction firms. The bill and accompanying regulations will create registration categories, from general contractors to tradesmen such as plumbers, roofers and masons, with a sliding scale of requirements and fees.
General contractors – businesses qualified to engage in construction, and civil contractors – businesses that build roads, docks, bridges and utilities infrastructure – must meet strict criteria for experience and qualifications. Smaller or less experienced businesses can apply for a separate category of “building contractor” for construction of commercial, industrial or residential buildings less than 25,000 square feet or three stories. Another category of “residential contractor” is for businesses that construct or renovate buildings comprising four homes or fewer.
The law establishes a Builders Board responsible for maintaining a register of business entities and qualified individuals in the construction field.
Businesses will be required to prove they have the necessary number of qualified individuals on staff to qualify in the category for which they are applying to be registered. Individual contractors and tradesmen will be required to demonstrate they have the necessary qualifications before they can be licensed under the legislation.
Two laws approved Wednesday will enable Cayman Islands-based funds and fund managers connected with the European Union to elect a regime of prudential regulation consistent with the EU Alternative Investment Fund Managers Directive.
The Mutual Funds Law and the Securities Investment Business Law both aim to assist the Cayman Islands in qualifying for a so-called “third country passport” under the European directive. The passport allows Cayman funds to be marketed to professional investors across the EU, rather than through private placement in each EU member state individually.
The European Securities and Markets Authority was to assess Cayman’s regulatory regime and its supervisory cooperation with EU regulators to provide advice to the European Commission on which jurisdictions should be considered for a “third country passport.”
The proposed amendments to the Mutual Funds Law introduce the concept of a “regulated EU connected fund,” which is managed from or marketed in a member state of the European Economic Area and elects to fall within the Cayman Islands Monetary Authority’s regulated EU connected fund regime.
The bill amending the Securities Investment Business Law creates the “EU connected manager” designation for individuals who fall within the existing scope of the law, who conduct management, marketing or depositary activities as defined by the EU directive and who voluntarily decide to fall within CIMA’s new EU connected manager regime.
The government authority that has responsibility for maintaining and improving local roads will now receive an annual fund of up to $10 million.
The National Roads Authority (Amendment) Law establishes two revenue streams that would provide a maximum of $10 million each year to pay for the authority’s operating costs, “in particular, the construction, upgrading, rehabilitation and maintenance of public roads.”
The revenues are proposed to be taken from fuel import duty charged and collected on gasoline and diesel, with the exception of duties charged to diesel fuel imported by the Caribbean Utilities Company. In addition, fees collected for motor vehicle driver’s licenses will go toward the road maintenance fund, referred to in the bill as the “road fund.”
The government made a temporary provision to fund the roads authority ahead of last year’s budget. Finance Minister Marco Archer said the $10 million from the taxes, which typically go into government’s general fund budget, would be given to the National Roads Authority specifically for road maintenance and construction.