One of the goals of Cayman Finance is to play a role in dispelling some of the misinformation that is circulated both internationally and closer to home regarding the local finance industry. Here are five often heard myths:
None or very little money generated through the Cayman Islands financial services stays in the Cayman Islands.
|Approximately 54% of the national GDP is generated through the financial services. Over 3,000 people are in full time employment in the financial services industry.|
|The Cayman Islands serves as a “tax haven” where US companies and individuals can launder money and hide their assets.|
The Cayman Islands is not a bank secrecy jurisdiction; it is fully transparent. The Cayman Islands has a comprehensive All Crimes Anti Money Laundering Treaty (1990) and a Tax Information Exchange Agreement (2001) with the United States and the EU that provides full transparency and prevent tax evasion. These treaties are more stringent than domestic US law. Cayman has worked with the IMF, OECD, FATF and others to create a stable and well regulated legal financial system.
|The Cayman Islands’ low tax rate is an anomaly among international jurisdictions.|| |
There are numerous other low tax jurisdictions around the world, including Ireland, Switzerland, the Eastern European countries, Hong Kong, Singapore, the UAE and Dubai. Most jurisdictions have a lower corporate rate than the US. All of these jurisdictions offer less tax transparency and less international all crimes cooperation than the Cayman Islands does.
|“Tax havens” such as the Cayman Islands were involved in financial wrongdoing that led to the current economic crisis.|| |
There has been no bank, financial institution or regulatory failure in the Cayman Islands. Cayman financial institutions have over the past decade provided trillions of dollars of essential liquidity from the international capital markets to US financial institutions through the mechanism of securitization and direct hedge fund investment thereby helping to avoid system wide US bank failures in recent years.
|Offshore accounts such as those in the Cayman Islands are used by multinational corporations to avoid paying any taxes or to commit tax fraud.|
US Corporations already pay taxes in the jurisdictions where they operate. Additionally all profits of subsidiaries of US parents – regardless of where they are incorporated – are concilidated and accounted for and taxable in the US as profits of the parent, except to the extent that legitimate tax deferral applies under current IRS code. Offshore financial centers, like Cayman, enable American companies to compete internationally and reinvest their profits; treaties with the US ensure they do not evade taxes.
For more information on the local finance service industry visit us at www.caymanfinance.ky