While Cayman long ago exited the business of ‘exporting seafarers’, the jurisdiction has not entirely left the maritime industry.
On island, diving and tourism rank among the most visible sectors that derive value from the sea. But off island, Cayman maintains a strong reputation in the shipbuilding business. In particular, Cayman has risen as a recognised and reliable jurisdiction for managing yacht construction, overseeing 43% of new builds in the superyacht business, according to statistics from the Maritime Authority of the Cayman Islands.
That means that worldwide more than four out of 10 new yachts over 30 metres are under Cayman supervision, and most of those clients will go on to fly Cayman’s nautical flag.
While that may seem like a significant chunk of the market already, the Cayman Islands Shipping Registry is aiming higher.
Kenrick Ebanks, MACI’s director of global operations, hopes to reach a 50% share of the market.
“Certainly, from the yachting aspect of it, the world looks to Cayman as the leader,” he said. “We are the leader.”
By the end of 2019, Cayman had 2,288 units of all types under its registry, the vast majority – 1,959 – of which were ‘pleasure yachts’.
The number of overall vessels registered with Cayman pales in comparison to jurisdictions like Panama and the Bahamas, where many cruise and merchant vessels are registered.
But where Cayman offers value is in the yachting sector.
When it comes to planning and ensuring these luxury ships are up to code, Cayman stands out.
“A lot of the other flags are very restrictive. The answer’s ‘yes or no’, whereas they see us as being accommodating,” Ebanks said.
“You tell us what you want, and we’ll figure out a solution.”
Cayman’s place in the global shipping registry market wasn’t always so clear. As a British Overseas Territory, the jurisdiction faced restrictions that other locations, such as Panama, did not have. The relationship with the UK meant additional costs and regulations when it came to aspects such as annual inspections.
“The UK itself was its own enemy because it was ‘our way or you can’t do it’. So that pushed away a lot of clients,” Ebanks said.
While Cayman is still bound by UK oversight, the jurisdiction has been strategic over the decades in cornering the yacht market. This has meant active collaboration with the UK in penning updated yachting codes.
In 2010, MACI worked with the Red Ensign Group to establish a Passenger Yacht Code that applies to pleasure yachts carrying up to 36 passengers.
Growth in the shipping registry world also meant careful consideration of where the island offers the greatest value.
“We said, where do we go? What is the angle that we can actually be successful in what we do?” Ebanks said.
“So we knew at that time that yachting was transitioning. It was becoming an industry. And we could actually add value.”
So far, the work has paid off.
“Today, people actually seek us out,” he added.
“They come to us and say the owner wants Cayman. The reputation kind of precedes the name and it helps a lot. That was how we were able to dominate the European yards, the American yards.”
An area where it has not been so easy for Cayman to break into has been with cruise ship registries. Local laws regarding gambling and marriage have complicated that business for Cayman.
“Obviously, those are two key lines of business on cruise ships. We have gotten over the hurdle of the gambling. The marriages have just proven to be a little more problematic,” Ebanks said.
The jurisdiction has found a workaround for gambling restrictions. While cruise ship passengers are not permitted to gamble once they are in Cayman waters, such ships would be allowed to permit gambling en route from one international port to another.
Overcoming additional hurdles in cruise ship registries remains a major goal for MACI.
“Cruise ships, as much as some might think it’s different, a cruise ship and a yacht aren’t that much different. They’re both leisure-related crafts,” Ebanks said.
Diversifying the Cayman portfolio into new areas is what keeps the registry staff motivated.
“Yachting will never go anywhere,” Ebanks said, adding that merchant ship registries are important to the jurisdiction as well.
“But we believe in diversification. No one would say that you should put all your eggs in one basket.”