Rich investors get 25-year residency

Wealthy investors who inject $2.4
million into existing or new companies in Cayman will be allowed to live here
for 25 years.

Under an amendment to the
Immigration Law, passed during a marathon Legislative Assembly meeting last
Wednesday, people with a personal wealth of more than $6 million, who invest in
a Cayman business where 50 per cent of the staff are Caymanian, can get residency
rights that are renewable every 25 years.

The Immigration (Amendment) Bill
2010 did not give the exact amount of personal wealth an individual should have
nor how much he or she would need to invest – those details would be set out in
regulations drawn up and agreed by Cabinet – but in his opening remarks to move
the bill, Premier McKeeva Bush outlined the requirements.

Members of the Opposition said they
could not support the amendment because they had not seen the regulations and
asked why the premier was trying to rush it into law.

Mr. Bush said the amendment to the
law was necessary to attract inward investment which could improve the economy
and create jobs for Caymanians.

The investors would be granted a
certificate of direct investment from the chief immigration officer, which
would give them the right to reside in Cayman and work in the business in which
they have invested.

The fee for the certificate of
direct investment will be $20,000 and the holder must also pay an annual fee
equivalent to the work permit fee that would apply to the job he or she would
do in the company.

A previous version of the
Immigration Law included a similar clause, which in November 2003 allowed residency
rights to those who invested a minimum of $1 million, but that was removed from
the legislation during the previous administration “because no-one applied”,
Mr. Bush said.

“This government remains firmly of
the view that important economic benefits can be derived from private
individuals investing significant amounts in local businesses such as new developments,
new industries, hotels for the tourism industry, and so on.

“The boost that such direct
financial investment would give to our economy cannot be overlooked and
incentives must be provided for them also as part of the overall package currently
being promoted to encourage investment,” Mr. Bush said.

The amendment allows for an
investor, spouse and dependent children to live in Cayman and for the investor
to work in the company in which he or she has invested.

Other requirements include: a clean
criminal record; a substantial business track record or entrepreneurial   background; knowledge relevant to the
business or venture; a seat on the company’s board of directors; and the
company must be likely to make a significant contribution to the local economy.
The investor and spouse must also be in good health and have adequate health insurance.

Certificate holders would be
required to submit to the chief immigration officer audited financial
statements and details of employment generated at the end of the second and
fifth year of his or her investment, and at any time after that upon request of
the chief immigration officer.

Mr. Bush said the certificate of
direct investment would not entitle the holder to a Trade and Business License,
a Local Companies (Control) Law License or any other business license in the
Cayman Islands.

“Rather the applicant must have
already applied for and obtained from the relevant board his business licenses.
In some instances that will undoubtedly mean that he will invest in a Caymanian
business with Caymanians as his partners, unless it is considered appropriate
that he should be issued with an LCCL or Monetary Authority License,” Mr. Bush
said.

Mr. Bush said the Department o
Commerce and Investment would be responsible for scrutinising and approving
applications.

Opposition member Alden McLaughlin
queried why the amendment had “come out of the blue.”

“Why is this necessary? Why do we
need this complex set of provisions to achieve what it seems to me the
government is trying to achieve, which is the ability of someone who has made a
substantial investment in Cayman to be able to live here… and work in that
particular business,” he asked.

He said existing regulations
already enabled investors to work and live in Cayman. “I don’t know why we need
all this. Presumably, some thinking has gone into this, but whatever it is, it
has not been revealed to this House in the premier’s opening statement.”

Arden McLean, People’s Progressive
Movement representative for East End, said he believed the new regulations
could be detrimental to small businesses in Cayman, effectively “opening the
floodgates” to foreign investors who would set up well-funded and larger companies
in competition with local smaller ones. He cited the example of a person
investing in a large charter boat business that could put local smaller boat operators
out of business.

He also questioned why someone
investing in an existing business in Cayman needed the kinds of incentives
offered in the amended law, and asked how many foreign investors had expressed
an interest or had committed to coming to Cayman to invest.

Minister of Education Rolston
Anglin angrily denied that the government had specific individuals in mind when
the regulations were being drawn up and accused the Opposition of “spreading
doubts about people’s motives”, adding that the government was trying to set up
a framework so that a system would be in place if investors and entrepreneurs
came forward.

Independent legislator for North
Side, Ezzard Miller, used the debate to try to introduce a minimum wage, asking
for an amendment to be included that would make it illegal to pay less than $6
an hour to employees of the companies in which the investors covered in the
bill are involved. His amendments were not supported by the other lawmakers.
Mr. Miller had made a similar attempt during a debate on an amendment to the Penal
Law earlier this year.

In response, Mr. Anglin said such
an amendment would need wide consultation and feedback, but that during the
UDP’s term in office, the issue would be discussed with the public.

The amendments were passed and the
House was adjourned sine dei.

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