Although real estate-based and business-related investment paths to residency in the Cayman Islands have existed for years, service providers called it one of the migration industry’s best-kept secrets at the Cayman Islands Residency by Investment Summit on Tuesday.
The event, hosted at the Kimpton Seafire Resort by one of the principal agents in the space, Latitude, and RIF Trust, showcased the government programmes that have so far drawn real estate investors, entrepreneurs and family offices to the islands.
Obtaining residency rights, and ultimately a second passport, is no longer just a business or wealth management tool but has increasingly become a lifestyle choice for high-net-worth individuals, not least since the COVID pandemic brought travel restrictions to North America, Europe and much of the rest of the world.
“Our clients have been facing a growing number of global, commercial, political and economic risks in recent times and that’s driving their desire to use options like the Cayman Islands residency programme as a tool to manage those risks,” said Daniel Altneu, managing associate at Bedell Cristin.
Cayman offers two residency options related to real estate investments.
Shift from retirees to wealthy families
“When I first started handling these applications, a decade ago, it was mainly a case of retirees looking for somewhere idyllic to live and with a slow pace of life. They typically purchased a condo in one of the beachfront complexes and acquired a corresponding 25-year residency certificate, which doesn’t lead to citizenship and doesn’t provide any right to work,” Altneu said.
This option requires a CI$1 million investment of which at least 50% must be invested in developed residential real estate.
Even if in most cases the entire amount is invested in property, there is flexibility in that investments can also be made with local brokerages or in local stock market-listed companies like CUC or Consolidated Water.
In addition, applicants must demonstrate that they have either a continuous source of at least $120,000 in annual income or deposit $400,000 with a locally licensed institution.
“However,” Altneu said, “in recent years, there’s been a significant shift towards wealthy families with young children, acquiring certificates of permanent residence.”
This ultimate option for many does provide the holder and spouse with a lifetime grant to reside in the islands, for a minimum investment of $2 million in developed real estate.
“It also gives them both the ability to work, should they wish to do so, and provides the entire family with a pathway to both Cayman Islands and British citizenship,” he added.
There is no obligation to reside in the property, which can be treated as an investment and held in the name of the applicant or a company.
Applicants can purchase one or more properties to reach the required minimum investment threshold. And there is no limitation on the choice of property, unlike in similar programmes around the world.
Business investment-related residency
A third residency option is tied to business investments.
This 25-year residency certificate for a substantial business presence was developed by the government to encourage businesses and family offices to come to the island by providing their key players with an easier and clearer path to residency.
It entitles the holder and any qualifying dependents to reside in the Cayman Islands and work in a business in which they have either invested or are employed in a senior management capacity.
Applicants must own at least 10% of the shares in the company, demonstrate a business presence by purchasing or leasing commercial real estate, and the business must have at least four full-time employees who reside on the island for most of the year.
Because this is comparatively onerous, most residency certificate applications are made by senior managers of such a business.
In practice, most applicants establish an exempted company and set themselves up as the sole shareholder, director and employee of that company.
Altneu said this has been popular with investment managers, financial traders and others who wish to migrate their business to Cayman but are happy to work from home.
It has also been used by family offices to relocate to Cayman and obtain residency certificates for their directors.
Quality over quantity
Compared to other jurisdictions that offer residency or citizenship by investment programmes, Cayman’s numbers are relatively low.
Last year, 50 applications were approved under the permanent residency category.
Cayman is very much focused on quality not quantity, said Altneu, and that is how it has always pitched the programmes, which are not widely promoted.
Most of his clients, he noted, come from North America and predominantly Canada, with interest also from Australia, Hong Kong, Dubai, Monaco, Switzerland and the UK.
The number of applications for the substantial business presence certificate are much smaller but increasing.
Some clients from jurisdictions with weak passports for visa-free travel purposes combine Cayman residency with citizenship from usually another Caribbean jurisdiction to bridge the at least five-year gap between acquiring residence and being able to apply for naturalisation and a British Overseas Territory passport, and later British citizenship.
Popular citizenship-by-investment programmes in the Eastern Caribbean, also discussed at the conference, mandate much smaller donations, government bond purchases or investments of just several hundred thousand dollars, compared to the Cayman Islands.
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