Budget of Cayman targets Budget Surpluses

November 4th, 2017

The Cayman Islands’ Premier, Alden McLaughlin, recently delivered the Cayman Islands’ first 2-year budget, which was notable for the absence of new borrowing or revenue-raising measures.

According to McLaughlin, his administration will continue to pay down debt and deliver operational budget surpluses to fund capital investment plans and provide for contingency against future economic shocks. He noted that taking the path of “fiscal responsibility” is crucial to giving businesses the confidence to invest in the jurisdiction.

Measures introduced previously to support economic growth will be maintained, including reduced import duties, lower business licensing fees, development concessions, and other measures to support small business. Also, the Government has committed to slashing at least 25% of regulations hindering small business.

McLaughlin reported on his recent visit to Brussels ahead of the EU’s planned year-end announcement to name jurisdictions it considers are not complying with global tax good governance standards. He said he explained about the reasons for the territory’s tax regime focusing on indirect taxes instead of direct taxes and outlined how the territory complies with OECD regulations, which he said places it in the same league as Germany, Canada, and the UK.

McLaughlin explained that the Cayman Islands has no double tax treaties allowing for the shifting of tax liabilities, and that businesses operating in the territory understand their obligation to pay taxes due in their home jurisdictions.

Cayman Islands argues Tax Haven title

October 29th, 2017

Jude Scott, CEO of the Cayman Islands’ financial services promotion agency, Cayman Finance, has decided to aim at a report labeling the territory as a “tax haven.”

Besides labelling as “tax haven”, the report on international financial centers, issued by the non-profit US Public Interest Research Group and the Institute on Taxation and Economic Policy, criticizes the jurisdiction for being slow to release private financial records and facilitating financial secrecy.

As to the criticism leveled at the territory, Scott noted that, not only is the Cayman Islands “transparent,” it has adopted more than 20 global financial standards and adheres to both the US FATCA rules and the OECD’s Common Reporting Standard.

“We meet none of the descriptions used by entities such as the OECD or Transparency International to define a tax haven. In fact, our system purposefully lacks any laws or regulations like double taxation treaties or foreign incentives that support the shifting of a tax base by foreign entities to avoid corporate taxes in their home jurisdictions,” said Scott.

“Reports such as this conveniently overlook how international finance centers like the Cayman Islands observe their commitment to global standards for transparency and cross-border information sharing with law enforcement and tax authorities,” added Scott.

Scott emphasized that the legislation and regulations adopted by the Cayman Islands make the jurisdiction a strong international partner to address any concerns.

Cayman imports fall by 2% in 1st quarter 2017

August 10th, 2017

The total value of all goods imported into Cayman in the 1st quarter of 2017 was CI$ 207.8 million, which is a drop of some CI$ 4.3 million as compared with the same period last year.

According to officials from the Economics and Statistics office, the decrease was due to a 6.1% reduction in the total value of non-petroleum products, which make up almost 89% of all imports into the country. The fall in imports of machinery and road vehicles, chemical and related products, and other commodities fell significantly.

The quarterly trade statistics bulletin reported a 4% increase in food imports and a massive 50% increase in petroleum and related-products, due in part to another increase in the price of oil on the global market.

However, this was not enough to offset the decline in other goods. With import duty a significant source of government revenue, the fall in the value of goods could have an impact on the public purse for those first three months of the year to the tune of more than $1 million.

Cayman has the Least Complex Tax Jurisdiction worldwide

August 2nd, 2017

In accordance with TMF’s Financial Complexity Index 2017, the Cayman Islands is the least complex jurisdiction as regards taxation and accounting requirements.

TMF’s Financial Complexity Index 2017 ranks 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific, and the Americas. The Cayman Islands is ranked 94th, which means that this territory has simplified tax reporting requirements and has low rates of tax.

Other least complex jurisdictions are Jersey (90th), Hong Kong (91st), the UAE (92nd), and the BVI (93rd).

The most complex jurisdictions are Turkey (1st), Brazil (2nd), Italy (3rd), Greece (4th) and Vietnam (5th).

Small Cayman businesses concerned over cost of finance

July 31st, 2017

According to the president of the Cayman Islands Small Business Association (CISBA), financial institutions are setting up entrepreneurs for failure because of the cost of loans. This was one of a number of issues that Dawn McLean-Sawney raised with the new minister for commerce, Joey Hew.

McLean-Sawney said small businesses need better concessions on loans to make payments viable.

Other difficulties the small business sector faced included the following:
– inadequate funding,
– too much red tape,
– securing venues to set up businesses,
– challenges based on definitions of micro (1-3 employees) and small (4-10 employees) businesses in provision of employee benefits.

Also, the small business sector needed more incentives, including a reduction in fees such as Customs and Trade and Business Licence fees, and encouragement for more women, especially single mothers, and retirees to be able to become small business owners.

CISBA, which currently has 120 members, was created to advocate for policies that are beneficial to local small businesses as well as to support and promote entrepreneurial spirit.

New Cayman financial services minister to advocate for offshore sector

July 26th, 2017

The new financial services minister of the Cayman Islands began her work as a voice for Cayman’s offshore sector during the recent visit to the United Kingdom for the Brexit meetings with the overseas territories. Tara Rivers was also advocating for the financial services industry, which she now has responsibility for in the new coalition government.

Rivers discussed Brexit, beneficial ownership and the EU screening process with both UK officials and industry leaders. Also, the minister visited the Embassy of China in order to discuss regulatory cooperation and China’s “One Belt, One Road” initiative.

According to an official release, “The Cayman Islands has always engaged with UK Government and industry on matters of bilateral and global importance”. Rivers emphasized the focus on “reinforcing the strength of our financial services framework by clearly addressing the legacy myths that affect our reputation among political leaders”.

Rivers was not alone in advocating for Cayman’s lucrative offshore sector, as Scott remained in Britain for two weeks, where he engaged with the international press as well as financial sector stakeholders in London.

“Cayman Finance, in conjunction with the Ministry of Financial Services, is constantly working to ensure we maintain strong and beneficial relationships with key international figures in the financial services industry,” Scott said. “It is important for us to keep reminding these stakeholders of the Cayman Islands’ role as a premier global financial hub and the ways in which we benefit developed and developing countries around the world. We are always grateful for the Cayman Islands Government’s support in these ventures.”

“The combined efforts of Cayman Finance, the Cayman Islands Government and our regulator, the Cayman Islands Monetary Authority, ensure that our financial services products and services are consistently delivered to meet or exceed our international clients’ expectations through excellence, innovation and balance,” Scott said. “We are extremely proud of the work that the Cayman Islands does both locally and worldwide, and will always seize the opportunity to spread our message around the globe.”

CIMA announces new appointments

July 11th, 2017

The Cayman Islands Monetary Authority (CIMA) has promoted two staff members to top positions within the organisation, as of 1 June 2017.

Suzanne Sadlier, who has been a reinsurance specialist at CIMA since joining the authority in April 2015, was named deputy head of the Insurance Supervision Division, and Judiann Myles, who had a three-year tenure as the deputy head of CIMA’s Policy and Development Division, was appointed deputy head of the Compliance Division.

“As the authority continues to highlight the quality of expertise amongst our employees, we are extremely pleased to fill these important top positions from within our organisation”, Cindy Scotland, CIMA managing director, said. “With a combined proven track record for successfully leading large-scale initiatives, experience in strategic planning and technical operations within financial regulation, each of the aforementioned appointments certainly add value to CIMA’s management team, and its overall structure,” she added.

Cayman-registered beneficial owners accessible to UK

July 4th, 2017

In the beginning of July, the new legislation came into effect in the Cayman Islands that will allow UK law enforcement authorities to access details of the beneficial owners of all financial entities registered in thejurisdiction.

The new technology-based system enhancement to the beneficial ownership regime will allow those with legitimate rights or reasons to have access to do so in a more efficient and timely fashion, with speed being the crucial point. The information is not in a central public register but this is a platform allowing direct access to the RCIPS Financial Crimes Unit so they can respond to requests.

Officials said a system had been in place for more than 15 years that provided beneficial ownership information to the United Kingdom and other countries through legal means, but the new system will increase the speed in which that information is provided.

However, the government has insisted that the system is not very different from the process in place for many years but the efficiency improvement satisfies the UK’s demand for immediate access in criminal cases.

“Financial crime is a serious global problem that requires a unified global response,” Rivers said. “As a jurisdiction, the Cayman Islands continues to play a significant role on international regulatory issues and for implementing global practices to fight financial crime; we have been recognised for decades as a strong international partner in combating corruption, money laundering and tax evasion.”

The UK wanted to have this access back in 2015. As a result, Cayman and the UK agreed in April 2016 to improve the exchange of beneficial ownership information, as outlined in a document called the Exchange of Notes and Technical Protocol. All UK Overseas Territories entered into similar agreements. Since then, Cayman has passed amended legislation, new regulations and guidance notes for industry in order to provide the legal framework upon which the system was enhanced.

Four year AML/terrorist financing plan announced in Cayman

May 29th, 2017

Following the shortcomings identified previously by the Financial Action Task Force (FATF) and in Cayman’s regulatory regime to address emerging threats and vulnerabilities in the financial sector, the attorney general Samuel Bulgin said a strategy has been developed ahead of the next FATF review. In a short statement the government’s chief lawyer, Bulgin said that significant progress had been made on anti-money laundering and terrorist financing but more work needed to be done before that review which will take place later this year.

He said: “The government recognises the need to take ongoing measures to update the AML/CFT regime to address the full range of risks relating to money laundering, the financing of terrorism and proliferation to the Cayman Islands and to communicate its strategy to relevant stakeholders”.

Responding to the threats and vulnerabilities identified in the recently published National Risk Assessment (NRA), a 4-year Anti-Money Laundering and Counter Terrorist Financing Strategy has been developed. According to Bulgin, the strategy will ensure that the jurisdiction has a “robust, adaptive and responsive AML/CFT framework, consistent with international standards, and effective in maintaining the integrity of the Cayman Islands’ financial services system”.

Cayman Hedge Fund conference attracts 530 delegates

April 26th, 2017

GAIM Ops Cayman, one of the largest financial conferences on Cayman’s events calendar, opened on April 24 at The Ritz-Carlton, Grand Cayman.

The leading 3-day conference for hedge fund operations and compliance is bringing 530 delegates from the industry to Cayman for presentations, workshops and networking sessions. The delegates are mostly senior executives, managers and investors in the hedge fund industry by more than 120 speakers.

Sheelah Kolhatkar, author of the newly released book “Black Edge,” on the largest insider trading investigation surrounding hedge fund manager Steven A. Cohen and his fund SAC Capital, will discuss what can be learned from government’s focus on insider trading cases over the last eight years.