The Cayman Islands are now the world’s fifth-largest financial centre in the world behind that of only New York, Tokyo, London and Hong Kong. This offshore tax haven is famous for just that, being a major tax haven. The Cayman Islands are located 1,000 km south of Florida, USA composing of 3 major islands with approximately 260 sq. km of land. The largest island, ‘Grand Cayman’ is home for the majority of the Cayman’s 52,601 residents with most Caymanians living in the capital of George Town.
The Cayman Islands are an impressive international financial and banking centre with forty of the world’s largest banks having representative offices or subsidiary operations. The Cayman Islands are also home to more registered companies than residents, approximately 200,000 companies (year 2013) are based in the Caymans. There are approximately 580 banks & trusts (2019), 830 captive insurance (January 2019) companies doing business within the Cayman Islands and over 10,500 mutual funds (year 2018) coupled with over sixty percent of the world’s offshore hedge funds taking advantage of the tax-free environment. Total system bank assets within the Caymans are at over $1.7 trillion USD equivalent. There is excellent support for the banking sector with representation from all the large international accounting and law firms.
The Cayman Islands are still a British crown colony with the United Kingdom Parliament at Westminster retaining the right to legislate. The Caymans have a Governor who is appointed by London, an elected legislature with no political parties ensuring the Cayman Islands are a very stable place to do business. The legal system is Common Law based on English Common Law. This framework provides stability to the banking and company formation industries on the Caymans. The Cayman Islands authorities have relaxed some rules relating to bank secrecy due to strong pressures from countries like the United States and Britain. It is now easier to access financial records for criminal investigations to ensure the Caymans banking system is not being abused by drug cartels.
The Cayman Islands have enjoyed stable democratic government since 1831. There is little government intervention in the economy and commerce. Internationally recognized for quality of financial services, the Cayman Islands are a leader in global finance. Development of the offshore financial industry began more than 40 years ago within the Caymans. The industry has been facilitated by the implementation of innovative national legislation allowing for an environment for the introduction of world leading first class financial services. Both the private sector and the government work closely to help formulate policies and legislation, this is done via the ‘Private Sector Consultative Committee.’
The economy of the Caymans is strong with full employment, the majority of revenue being derived from the financial services sector and tourism. The Cayman Islands offer modern international telecommunication services along with frequent commercial airline service, Miami only being a short one-hour flight away. Official language is English, and the Caymanian dollar is national currency (1 KYD = 1.219 US-dollar ‘USD’). No exchange controls presently exist. There are no direct taxes in the Cayman Islands relating to individuals, corporations or trusts. No capital gains, no inheritance, no property taxes and no gift taxes. The Cayman Islands have the highest per capita incomes in the Caribbean and the world at 43,800 USD of which is on par with that of the United States. Prosperity is evident everywhere with many new luxury hotels, condominiums, cars and restaurants.