2025 began with financial services firms having to absorb fee increases agreed in 2024 while more fees were added as the year progressed.
On 1 Jan. 2025, financial firms operating in Cayman saw increases to the annual fees they pay to the Cayman Islands General Registry and the Cayman Islands Monetary Authority.
Ostensibly the increase in fees did little to stem demand for Cayman as a financial services centre. As we reported in August, the first six months of the year saw an increase in active companies and partnerships. A total of 6,440 new companies were incorporated in Cayman during the first six months of 2025.
The combination of higher fees and increased financial services activity helped to swell government revenues. Of course, it’s no secret that fees levied on the financial services sector support a large share of Cayman government spending but in September a new report commissioned from Cayman Finance suggested the contribution may be bigger than thought.
The latest report, which was undertaken by UK-based consultancy Capital Economics, estimates the sector accounted for 44% of the islands’ economy in 2023 and 45% of government revenue in 2024. That’s higher than previous estimates of 40.2% and 42%, respectively.
More fee increases in the year
But if financial services firms expected a respite for the rest of the year they were mistaken.
On 14 Nov., Minister of Finance and Economic Development, Rolston Anglin, revealed significant increases to a wide range of fees paid by banks, trusts, insurance companies, accounting firms, legal firms and exempt companies that will be effective in 2026. There was also another round of increases to registration and annual company fees.
As Compass reported in November, the business reaction to this round of fee hikes was mixed. Some felt that profitable financial services sector could easily absorb the increases.
“When you look around at lawyers earning between US$1,000 and US$1,500 an hour, it’s clear that there’s no economic hardship in that sector and long overdue for a rebalancing of costs,” said Simon Cawdery, director at HLX Management. “It won’t disincentivise any lawyers to work here since the rates they are earning are highly attractive.”
Yet others questioned if the fees would raise the $79.91 million in additional revenue in 2026 and $97.26 million in 2027 that the government projected.
Limited immigration impact
Immigration has been the hottest political topic of 2025. On 12 Dec. the government passed its immigration bill through parliament.
Cayman’s financial services professionals held differing views on how the government’s immigration reform bill would impact their sector.
On one end of the scale was attorney Nick Joseph, founder of relocation advisory consultancy, Reside Cayman, who said: “The new immigration bill won’t have any material impact for the vast majority of financial firms.”
At the other was Chris Johnson, the managing director of Chris Johnson Associates, who believes the bill is the latest sign of the breakdown in relations between the government and business. “Laws and regulations are introduced without thought, which are frequently harmful to the business community,” said Johnson.
Other financial services figures, who didn’t want to go on record, felt the bill would have limited impact on Cayman’s status as a hub.
Cayman’s financial services sector has been hit by a plethora of fees in 2025. But as Compass reported in November, the tone of the debate in parliament, suggests banks may face new, additional fees in 2026.
Yet the year ended on a positive note for the financial services industry, with the confirmation that the Companies (Amendment) Act 2024 would take effect on 1 Jan. 2026.
“It is very welcome,” said Christian Victory, partner at HSM law firm, who leads the corporate and commercial department. “It shows how the government can make small adjustments to maximise the attractiveness of the Cayman product.”
“By simplifying share capital reductions and expanding continuation and conversion options, it gives companies greater flexibility to structure and reorganise efficiently, while maintaining appropriate safeguards,” says Megan Wright, partner and head of corporate at Stuarts Humphries.
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