Why Cayman is here to stay?
There are many reasons why the Cayman Islands remains one of the world’s most vibrant offshore financial centers.
This is a brief summary from an article published in the Cayman Funds Magazine as written by the CEO of Cayman Finance, Gonzalo Jalles. Here he lists 10 reasons why he believes Cayman has retained its position against intense competition.
- The legal and judicial framework is a vital characteristic. Investors looking to co-invest with foreigners or to deploy capital outside their home countries see the exposure to a different legal system in which to establish and enforce their rights an added risk. This is without a doubt a key driver of an IFC such as Cayman- the provision of a legal framework that is acceptable to all parties involved in the transaction.
- Political stability. Changes in the political landscape can affect the viability of an IFC at a higher speed than any other factors from extreme cases of property confiscation, independence and therefore change in legal framework, to a different approach to rules that affect some of the key factors needed by the financial industry. Cayman is without a doubt ahead of its key potential competitors in this area, including the other major UK territories in the region.
- Access to human capital. The availability of foreign labour to local financial services providers is one of the ways in which local firms can access the required human capital with the necessary skills. It is also essential to the sustainability of these centers that the local population is given a fair opportunity to train themselves and gain access to the industry.
- Availability of land. Without land the social cost of growth is high and without growth the countries find themselves faced with typical fiscal and economic problems. Cayman is uniquely positioned in this reagrds vis-a-vis all the other Overseas Territories in the region.
- Critical mass. Without the critical mass to support the regulatory framework needed to comply with international standards, some centres will find themselves falling short and unable to offer products, or imposing taxes, fees and duties that effectively price them out of these markets. Both Cayman and Bermuda have achieved critical mass, while other centres in the Americas are likely to face a challenge of increasing government costs to cope with the increasing global regulatory pressures.
- Credit quality and the fiscal situation. Cayman is currently running a surplus, and this has been recognized by its retention of its credit rating at the same level as it was before the 2008 crash.
- The government’s revenue collection system. In order to operate as a facilitator of international capital flows, financial centres need a government revenue collection system that facilitates those flows without taxing them on a variable basis. It is crucial that the collection system is properly structured to avoid discouraging these important flows. In order to achieve this, most financial centres have concentrated their taxes on consumption, which is one of the less distortive taxes and the less damaging to economic growth, as Cayman did.
- Accessibility. Location is the first obvious measure of accessibility however accessibility should also include language, a diverse and yet cohesive society. Cayman is positioned one step ahead from other centres in this regard.
- Focus. Financial services represent more than half pf Cayman’s GDP and government revenue, ensuring it receives the attention needed for its continuous success.
- Appropriate regulation. Remaining agile it today’s world means that the regulator needs to perform a constant balancing act. Historically the Cayman Islands Monetary Authority (CIMA), the Cayman regulator, has successfully navigated the changing landscape while maintaining this equilibrium.
Cayman is uniquely positioned in the Americas to remain the undisputed leader in the funds industry and become the leader in others.
If you have been sitting on the fence about making your move to Cayman to work in the finance industry or to even move your investment business to Cayman, this article should help you pack your suit cases and book your tickets.
And when you do get here, remember to call International Realty Group Ltd, the only fully integrated real estate brokerage in the Cayman Islands that will find your new home, help you move, assist with the logistics and last but certainly not least, furnish your office and help you to call Cayman home!