s.6Criteria for registration of a business entity as a contractor
6
Section 6Part 3 — REGISTRATION OF BUSINESS ENTITIES

Criteria for registration of a business entity as a contractor

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Subject to the other provisions of this section, a business entity shall, on application made to the Board in the prescribed manner and on payment of the prescribed fee, be entitled, subject to regulations made under section 40(2)(g), to be registered if the entity satisfies the other requirements for registration under this Part, but the Board may refuse to register an entity if —
the Superintendent of Health Insurance appointed under the Health Insurance Commission Law (2016 Revision) informs the Board in writing (on that person's own initiative or upon inquiry by the Board), which power and duty are hereby conferred, that the business entity concerned is not up-to-date with health insurance contributions;
the Director of Labour appointed under the Labour Law (2011 Revision) informs the Board in writing (on that person's own initiative or upon inquiry by the Board) which power and duty are hereby conferred, that the business entity concerned has an outstanding breach of the said Law, the Workmen's Compensation Law (1996 Revision) or any other Law (other than the Laws specified in paragraphs (a) and (c)), the enforcement of which falls under the Director of Labour;
the Superintendent of Pensions referred to in section 79 of the National Pensions Law (2012 Revision) informs the Board in writing (on that person's own initiative or upon inquiry by the Board), which power and duty are hereby conferred, that the business entity concerned is not up-to-date with pension contributions; or
the business entity concerned does not have public liability insurance at all or to such extent as may be prescribed in regulations made under this Law.
In addition to the other requirements of this Part, the Board shall not register a business entity unless it is satisfied that such business entity has under its control a sufficient number of qualified persons in accordance with regulations made under this Law to carry out the work in the category for which the entity is applying and the entity is otherwise suitable for registration in that category.
Subject to any general directions which the Cabinet may from time to time give in respect of the consideration of applications, the Board may grant an application either conditionally or subject to such terms and conditions as it thinks fit, or may refuse the application, and shall, in deciding whether or not to grant a licence, have regard, among other things, to the following matters —
the economic situation of the Islands and the due protection of persons already engaged in business in the Islands;
the nature and previous conduct of the company and the persons having an interest in that company whether as directors, shareholders or otherwise;
the advantage or disadvantage which may result from that company carrying on business in the Islands;
the desirability of retaining in the control of Caymanians the economic resources of the Islands;
the efforts made by the company to obtain Caymanian participation;
the number of additional people from outside the Islands who would be required to reside in the Islands were the application to be granted;
whether the company, its directors and employees have and are likely to continue to have the necessary professional, technical and other knowledge to carry on the business proposed by the company;
the finances of the company and the economic feasibility of its plans;
whether the true ownership and control of the company have been satisfactorily established; and
the environmental and social consequences that could result from the carrying on of the business proposed to be carried on by the company, but the considerations in this subsection shall not apply to a company that is wholly-owned by Caymanians.
A business entity may be registered as a contractor in the category of —
general contractor – high rise;
general contractor;
building contractor;
small works contractor;
civil engineering contractor;
electrical contractor;
elevator and conveyance contractor;
fuel gas contractor;
fire protection contractor;
mechanical contractor;
plumbing contractor; or
(other specified) – contractor,
A business entity that desires to register as an (other specified) - contractor may apply to the Board for registration at the business entity's discretion, provided that, if the business entity is so registered, this Law shall govern the business entity but such registration shall not be required except where the (other specified) - contractor is required to consult with Department of Planning in the discharge of their duties.
A contractor having been registered by the Board in one of the categories specified in subsection (4) may also be registered as a contractor in another category if considered by the Board to be so qualified.
An individual seeking to engage in owner-contracting may apply to the Board for an exemption from the registration requirements under this Law, and such an exemption may be limited to a single house or duplex once every seven years, but the time limitation shall not apply —
to additions, ancillary buildings, conversions between single houses and duplexes and renovation of existing buildings; or
as determined by the Board in special circumstances.
A labour broker shall not be registered under the registration categories.
A business entity that enters into a contract with a labour broker or another business entity for the supply of labour to conduct work on a project shall ensure that the labour broker or other business entity is in compliance with the Trade and Business Licensing Law (2019 Revision) prior to entering into the contract and over the duration of the contract.
A contractor registered by the Board in one of the categories specified in subsection (4) or a person engaging in owner contracting may sub-contract work to a business entity from another category but shall be responsible for the resultant construction.
Registration under this Law shall not have the effect of dispensing with the necessity of compliance or obtaining permission where such permission or compliance is required under any other Law.
A body corporate shall be registered under this Law only if —
it is empowered by its Memorandum of Association to carry on business in the Islands in relation to which it seeks registration;
it is Caymanian-controlled;
at least sixty per cent of its shares are beneficially owned by Caymanians; and
at least sixty per cent of its directors are Caymanians, but a company need not comply with the requirements in paragraphs (a) to (d) if that business entity existed at the time of this Law coming into effect and it operated on the basis of a licence issued under section 11 of the Local Companies (Control) Law (2019 Revision), and the business entity has been operating as a construction entity in the Islands for a period of twenty years or more.
If, for reasons beyond its control, more than sixty per cent of the shares in a business entity cease to be beneficially owned by Caymanians, the company shall be taken to be complying with this section until —
a director becomes aware of the cessation; or
a director should, with reasonable diligence, have become aware of the cessation, whichever is the sooner, and shall then continue to be taken to be complying with this section if —
the directors immediately act in accordance with subsection (7); and
the period mentioned in subsection (9) has not expired.
For the purpose of subsection 7(b)(i), the directors must serve written notice on the person who is not a Caymanian and whose beneficial ownership of shares in the company results in the percentage of shares in the company owned by Caymanians falling below sixty percent requiring the person who is not a Caymanian to divest themselves of at least so many of those shares as will result in at least sixty percent of the shares in the company being beneficially owned by Caymanians.
The period referred to in subsection (7)(b)(ii) is —
the period of three years starting on the date of the service of the notice under subsection (8); or
such longer period as the Board may allow.
For purposes of clarification, it is declared that the holding of a licence under the Local Companies (Control) Law (2019 Revision) does not entitle a business entity to registration under this Law.
A project manager who hires or directs any on site labour or any contractor commits an offence and is liable on summary conviction to a fine of five hundred dollars.
In this section "permission" includes registration, licence, authorisation and permit.

Defined Terms

permission

Cross References