(CNS): The government has passed legislation enabling it to freeze the granting of Local Company Control Licences for a period of time in any sector. LCCLs are required for companies that are less than 60% Caymanian-owned, and the aim of the amendment is to improve protection for existing local business owners and to open up more entrepreneurial opportunities for Caymanians.
While LCCLs make up only a small percentage of the trade and business licences issued each year, in some sectors, such as watersports operations and development, foreign ownership is problematic and could be the first areas where Cabinet will freeze the granting of new licences.
Premier and Commerce Minister André Ebanks told parliament on 2 October that the aim of the new legislation is to give Cabinet “a clear and time-limited power to pause the grant of local companies control licences generally or for a specified kind of or type of company where there’s a public interest to do so.
“The bill itself does not impose a moratorium or prohibit foreign investment,” he told his colleagues as he presented the bill. “Any moratorium would require a later separate cabinet order identifying the type of company covered, the activity in question, and the commencement and expiry dates. It would be supported by evidence, consultation, and implementation arrangements.”
The change is part of a wider plan to create more business prospects for Caymanians, the premier said. “We do not have to choose between Caymanian opportunity and international investment,” he said, because the law can help Caymanians with a fairer prospect to own, lead and grow businesses in their own country.
Generally, to obtain a trade and business licence, a local company must be 60% owned by Caymanians. Where that is not the case, a company will need an LCCL before it can get a trade and business licence, which currently accounts for about 2% of businesses operating in the Cayman Islands. About half of those are in the property sector, including developers.
Ebanks said that since the last administration, the government has had meetings with Caymanian developers, who have said that the law, which has barely changed since the early 1970s, implies that they cannot handle the business. “It was an uncomfortable meeting,” he said, as they contend they can properly meet the needs of the development sector.
A private member’s motion was passed in 2024 and another in June this year asking the CIG to consider stronger companion-ownership in certain business areas and a moratorium on LCCLs.
“This has been a recurring issue in the House,” Ebanks said, adding that he had committed to addressing the issue by enabling Cabinet to pause the granting of LCCLs when it is in the public interest to do so.
“Caymanians now have the skills, experience and access to capital in fields that they maybe didn’t have in years gone by,” Ebanks said. “I think the aims are clear. I think we know why we’re here. I don’t know that we have to… pussyfoot around… We have to take the turn and move with the tide of transformation.
“This is something to be proud of. It actually isn’t something that we should think is controversial and get all itchy about. This is something that our foreparents would be saying, ‘You all need to do this. We did what we had to do at the time with what we had.'”
With more Caymanians now in a position to get involved in more diverse, complex or specialist businesses, the need for LCCLs should be decreasing, and the bill, which had wide support across both sides of the aisle, “creates a transparent, time-limited tool. It protects pending applications and provides a public interest exemption route when necessary,” Ebanks noted.
He said it paves the way for evidence-led decisions following consultation; it neither discredits international capital nor treats it as an automatic substitute for Caymanian enterprise, but is a mechanism that allows Cabinet to boost local participation in business areas where Caymanians are clearly qualified, capable and have the financial wherewithal to get the job done.
As the premier wrapped up the debate, he said it was an obvious piece of legislation and opens the door to other issues that are plaguing this law, including the abuse of the system. New regulations will follow, he said, indicating that the first area where LCCLs will not be granted is likely to be watersports.
He said there was no need for a major study on that. “We can decide that right here because it is obvious on its face,” he said.
See the debate on CIGTV below: