The “Panama Papers” episode has brought into sharp focus the need for the Cayman Islands to up the ante when it comes to promoting exactly why this jurisdiction is so successful as far as financial services are concerned.
We have to do this so that potential residents to the island, those looking to purchase property and make a life here for themselves and their loved ones, are not swayed by misconceptions about “offshore,” bandied about by international media still in the dark as to why Cayman is so successful.
I attended a panel discussion at the Cayman Islands Shipping Summit during Cayman Maritime Week in May. One speaker at the event, Michael Matthews, a partner at law firm Maples, did an excellent job of succinctly defining what makes Cayman an obvious choice for investors. I thought that many of his points could be applied in general as to why Cayman is a great place to live.
The obvious plus points are that we offer tax neutrality for residents, though to say we are tax-free would be incorrect, as residents pay duties to government on imported goods far in excess of those paid in the U.S. and U.K., for example. Our tax neutrality is of benefit to international finance, in particular for cross-border and international transactions, importantly, with no extra tax implemented on top of the tax already paid by investors in their own jurisdictions.
The country as a whole is considered “low risk,” which means investors can view us as being politically and economically stable, an important consideration for potential investors and also potential residents, who have safety and security as high priorities, on a political and economic level as well as on a personal level. Cayman ought to be promoting our safety far more loudly because in my opinion we stand head and shoulders above our competitors in this respect.
Mr. Matthews went on to say that the Cayman Islands has a leading financial services industry that is sophisticated and well developed with an experienced and relatively large professional workforce. In my opinion, we are fortunate to be able to attract the best of the best in the world, who may consider coming here to work and reside. The fact that such brainpower is based here gives us an incredibly strong industry which helps to sustain our economy, builds stability within the community and ensures we are a self-reliant jurisdiction and thereby not a draw on U.K. taxes.
He also gave an excellent overview as to more specific reasons why investors are attracted to our shores, including our wide variety of structuring options, our creditor friendly insolvency regime, the fact that we have been internationally recognized for our bankruptcy remote structure and the fact that we can offer investors separate corporate personality, all excellent plus points for us but all in need of far greater promotion, in my opinion. These are important niches in the market in which Cayman has excelled, and so they need far more promotion globally.
Notwithstanding the above, we also offer a commitment to international standards on tax transparency, we are appropriately regulated via the Cayman Islands Monetary Authority, we are inexpensive and we even offer our own Cayman Islands Stock Exchange that is commercial, fast and relatively inexpensive.
Let’s shout loudly and broadly about all the fantastic benefits Cayman offers those who want to invest, work and live here, because the more understanding (both locally and globally) of what it is we do, the better it is for all of us. And, having said this, a benefit of having strong financial services is that real estate investors have the added advantage of knowing that the country is not solely reliant on the tourism industry.