Cayman Enterprise City, Cayman’s knowledge-based special economic zone, estimates it has had an economic impact of $12.6 million since its inception in February 2012.
CEC anticipates that its future investment in the construction and development of the main campus alone is going to be $317.3 million over the next 10 to 15 years.
“We will build the campus as quickly as our client pipeline demands, but the overall campus, once completed, will have resulted in essentially over $300 million being injected into the local economy,” said Charlie Kirkconnell, chief executive officer of Cayman Enterprise City.
CEC hopes to finalize the acquisition of a property for the campus by the end of this year or early next year.
The zone’s revenue generation for government, as expected, is relatively modest, given the low cost of a trade certificate ($150), zone employment certificate fees ($1,500) and reduced incorporation and annual registration fees. Much more important to the economy is the direct and indirect spending of the newly attracted zone companies and their staff.
Mr. Kirkconnell said it was always the economic objective of the zone to attract foreign direct investment and expand the economy by bringing new people to the island. In addition, the new types of companies in the zone would also bring employment opportunities for Caymanians.
Of the 110 people working in the zone, approximately 15 to 20 are Caymanian, Mr. Kirkconnell said.
When companies first set up, they tend to bring their core group of people with them and then look at the local employment market to expand, he explained.
“In fact, recently one of our newest clients has been very active in the local employment market and hired five people already and anticipates hiring a significant number more. He is actively out there looking for Caymanians to work in the zone.”
For most companies it can be cheaper to hire locally than to relocate a larger group of employees. To this end, CEC offers a jobs portal that is free for jobseekers to post their CVs online and for companies to post job openings. CEC has also introduced clients to the National Workforce Development Agency, he said.
The special economic zone has been filling up more rapidly recently. CEC started the year with 29 companies in the zone and now there are 91.
Of the 91 companies, 68 have received their trade certificates and the remainder are going through the licensing process before moving to the Cayman Islands over the coming months.
The estimated economic effect of $12.6 million since inception of the zone is composed of a direct impact of $10.6 million through September 30, 2013, which includes set-up and maintenance costs for the zone companies, spending for office fit-outs and equipment and real estate purchases.
“It is necessary for each company which establishes within the special economic zone to engage a local law firm or corporate services providers to assist with incorporation, and many also request the services of a local accounting firm for tax structuring advice,” Mr. Kirkconnell said.
The overall economic effect also considers an indirect impact of $2 million from the money spent by zone company employees.
Each director and any employees who relocate to the Cayman Islands require a plethora of services from local Cayman business such as shippers, movers, recruitment agencies, banks, health plans, pension plans, office supplies and computer equipment, IT services, telecom services and many more, he noted.
CEC based its calculation on the number of zone employment certificates, their estimated average salary, derived from the median ICT salary in the U.S. and Canada, and the assumption that zone employment certificate holders would spend about 50 percent of their salary in the local economy. CEC said it is actively engaged with a further 221 companies in its sales pipeline.