The number of offshore companies being registered during the first half of 2012 was up 9 per cent from the previous six months, according to a new report by law and fiduciary firm Appleby.
The inaugural “On the Register” report suggests that numbers from the British Virgin Islands, the Cayman Islands, Bermuda, the Crown Dependencies, Mauritius and the Seychelles, indicate markets continue to recover from the lows of early 2009.
It concludes that jurisdictions such as the British Virgin Islands, Cayman Islands and Mauritius likely will continue to remain attractive destinations for registering offshore businesses.
The Cayman Islands is the fastest growth jurisdiction for new registrations, with a 13 per cent increase since the previous six months, the report said.
“Cayman is doing very well, despite the global economic uncertainty,” said Richard McMillan, managing director of Appleby Trust (Cayman) Ltd. and Appleby Fund Services (Cayman) Ltd. “When economies are robust, Cayman attracts registrants because we offer high degrees of contractual flexibility and legal certainty. During downturns, Cayman is an attractive jurisdiction for transactions related to workouts and spinoffs.”
Globally, offshore new company registrations are slowly returning to the levels that were seen before the recession. However, the report, which looks primarily at data for the first six months of 2012, sounds a cautionary note that there is still some volatility in the marketplace. For example, the number of new offshore company incorporations in the first half of 2012 represented a decrease of 4 per cent on the same period a year earlier. The volatility is also confirmed by Cayman’s third quarter company registrations, which fell behind the activity seen in 2011 during the same period by 4.1 per cent, the most recent statistics from the Cayman Islands Company Registry show. The third quarter 2012 was the weakest since a peak during the third quarter of 2007.
The British Virgin Islands continues to maintain a six-fold lead ahead of the Cayman Islands, its nearest competitor, the report showed.
The Seychelles is the offshore economy witnessing the greatest growth in activity, albeit that this jurisdiction’s data lags behind the other jurisdictions being tracked for the report. Between 2010 and 2011, company registrations in the Seychelles grew by 20 per cent.
While the number of new company registrations grew in the first half of 2012 in selected offshore centres, with 41,556 new offshore incorporations, the report notes that the total number of active companies is actually down 4 per cent from 833,086 in December 2011 to 801,168 through June 2012.
The United Kingdom and Hong Kong as onshore competitors, in turn, are showing signs of continued recovery with total active companies 4 per cent higher than at the end of 2011. The UK is projected to have 200,000 more active companies at the end of the year compared to 12 months previously.