The Leader of Government Business McKeeva Bush has assured representatives of the investment fund industry in Cayman of his commitment to easing recruitment difficulties in terms of immigration regulations.
Addressing delegates of the Campbells Cayman Fund Focus conference as a key-note speaker on Friday, Mr Bush stated: ‘I am well aware that there is a growing practice of outsourcing mid-office staff to other jurisdictions by some of our local firms.’
He added the nature of Cayman’s immigration regime contributed greatly to firms taking the decision to relocate staff to other jurisdictions.
‘Our government wishes to do what is necessary to have those staff members relocated back to the Cayman Islands,’ Mr Bush said and announced his intention to seek a dialogue with individual firms ‘to better understand the decision to employ staff in other countries and work out the issues’.
Mr Bush said the government was fully aware of the benefits of a foreign work force in terms of government revenue, the spin-off benefits to Caymanians and the direct benefits to the local economy.
Firms must have the ability to recruit the staff they need in the most efficient manner, he said.
While conceding that immigration is never an easy issue to tackle for any government, Mr Bush argued: ‘We are determined to fix it.’
Without outlining any details the leader of government business announced, that ‘changes will be made within the next few weeks, which will make it easier for fund administrators and other financial services firms to recruit their staff.’
He emphasised this would be a two-way street, requiring the financial services industry to continue to train and employ Caymanians.
In addition the government aims to attract more businesses. Mr Bush asked the industry for assistance and feed-back on how to attract fund managers and other investment professionals to the Cayman Islands.
The issue was also touched upon in one of the panel discussions at the conference, hosted by local law firm Campbells.
In response to the question why Cayman was losing so many fund administrators, Colin Nicholson, a partner at KPMG in Cayman, identified several factors, of which lower costs in other jurisdictions was the key issue.
Mr Nicholson pointed out that many fund administration task can be carried out by non-qualified accountants in other countries, where salaries are much lower than in Cayman. Despite the beneficial tax treatment, comparatively higher wages would reduce the profit margins for Cayman fund administrator very quickly, he said.
Even if companies sought to employ locally, the demand was not met by the supply. The solution would require changes to work permits and immigration policy, Mr Nicholson said. As a third reason he emphasised that historically fund administrators had Cayman roots, but nowadays, due to industry consolidation, decision makers were often unfamiliar with the professional environment and the service quality that can be delivered in Cayman.
‘They are just looking for the bottom-line in these businesses, the basic economics and profit margins,’ he said.
The conference focused on a range of issues affecting the fund industry in Cayman and globally, including proposed regulation of investment funds in Europe and the US.
The effects of the financial crisis and the Bernard Madoff Ponzi scheme on the manager-investor relationship, fund transparency, due diligence, fund structures and risk management were the most prominent topics in the panel discussion.
Legal issues around fund restructuring and liquidations and questions of personal liability of fund managers, directors, administrators and other service providers dominated the afternoon sessions.