Archive for the ‘offshore centre’ Category

Small Cayman businesses concerned over cost of finance

Monday, 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

Wednesday, 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.”

Cayman-registered beneficial owners accessible to UK

Tuesday, 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

Monday, 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

Wednesday, 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.

Offshore Finance Industry is important to Cayman

Thursday, March 30th, 2017

Jude Scott, the CEO of Cayman Finance, said that the offshore financial services sector is important to everyone in the Cayman Islands and not just those making a direct living from it.

In Order to get the understanding by the local community at a time when the industry continues to come under attack, not just from overseas but more recently at home as a result of the Legal Practitioners Bill, Cayman Finance has launched a local awareness campaign about the sector.

“The financial services industry has such a positive impact on our community,” Scott said. “We understand it can sometimes be difficult for members of the wider community to see the positive influence the industry has on all residents, but the industry accounts for more than 50% of government revenue – that’s in excess of $300 million each year – which helps to fund education, healthcare, infrastructure, charities and more.”

The finance industry employs over 5,000 people including more than 2,700 Caymanians. And it is not just lawyers, accountants, but also IT and marketing professionals. Also, the finance sector buys services from large, medium and small businesses in other industries in the Cayman economy helping to create jobs indirectly.

Hoping to raise awareness about what the financial services industry does and its impact on the wider community and economy Cayman Finance will be giving presentations to various organisations, associations and businesses within different sectors.

Cayman Premier in London to promote offshore sector

Wednesday, March 1st, 2017

Premier Alden McLaughlin will be promoting the Cayman Islands, including its offshore sector, in London.

The delegation left on March 1 and will return to Grand Cayman on March 8, 2017.

Premier has been invited to deliver an address at a conference at Blackstone Chambers, entitled, “Current Issues in Rule of Law and International Trade and Development”. Also, he will be attending the event hosted by the well-known barristers chambers, to meet with the overseas territories minister, Baroness Anelay, and other British officials.

The conference will be chaired by Blackstone Chambers’ Sir Jeffrey Jowell QC, who advised the PPM during the shaping of the Cayman Islands 2009 constitution. Other guest speakers include Michael Llamas, Attorney General of Gibraltar; Justice Angelica Nussberger, Section President and German Judge on the European Court of Human Rights; and Justice Catherine O’Regan, former member of the Constitutional Court of South Africa and Director of the Bonavero Institute of Human Rights at Oxford.

According to McLaughlin, the conference would give him “an opportunity to say what the Cayman Islands has done in respect of having an advanced bill of rights, an independent judiciary, anti-corruption provisions and how our government has worked to enact and enforce laws against money-laundering and tax evasion”.

US treasury secretary nominee advised to eliminate Cayman Islands and other tax havens

Wednesday, January 25th, 2017

When questioning the new Trump administration nominee for Treasury Secretary, members of the US Senate, asked Steve Mnuchin how he intends to close down Caribbean tax havens, specifically naming the Cayman Islands.

The senators focused upon the Cayman Islands in showing their displeasure of what they clearly indicated was abuse of American tax laws.

Details have recently emerged how financial service professionals working in the Cayman Islands intentionally use combinations of jurisdictions, like forming a BVI company, owned by a Belize trust, to create a totally opaque, non-transparent vehicle, tax-free, with no identifiable beneficial owner.

After the Panama Papers scandal, members of the Senate and the House of Representatives have affirmed the immediate need for effective tax reform, whether through new legislation or Treasury regulations, to eliminate the present situation. They appear to be looking for the incoming Treasury Secretary for a solution. Political pressure is clearly present on this matter.

Cayman listed as 2nd worst tax haven

Tuesday, December 13th, 2016

The Cayman Islands has been listed as one of the worst corporate tax havens in the world in a new report examining the impact that tax-dodging corporations have on the world’s poorest people. Published by the international charity Oxfam, the report lists Cayman in second place behind Bermuda because of the zero-rated corporate income tax and what the charity said is a lack of cooperation with international efforts against tax avoidance.

But Oxfam stated in the report that there is a destructive race to the bottom on corporate tax.

Also, it said that the growth in the use of tax havens means countries are finding it harder and harder to tax income from capital. Government coffers are declining and the burden of tax has shifted toward poorer workers and small businesses and away from powerful conglomerates and the world’s high net worth individuals.

Oxfam names on-shore countries as well as offshore financial centres, such as Cayman and Bermuda, but the charity is calling on world governments and corporations to facilitate much more transparency over who owns what and who pays tax where on their earnings and profits. The charity also raised concerns that in the country-by-country reporting between government authorities the information is still not public. This means developing countries cannot access the data.

Responding to this latest critical report, Financial Services Minister Wayne Panton accused Oxfam of making errors on its list and of exploiting misinformed public opinion, as part of an agenda to influence the public policy of G20 countries.

Panton said that the report “may be detrimental to the overall shared goal of combating criminal behaviour and addressing income inequality”. He claimed that Oxfam’s overriding error is their failure to differentiate between capital flows and profit shifting.

To engage in profit shifting, a jurisdiction must attract significant multinational corporations, or MNCs, he explained. “Cayman does not have this type of business. We do, however, receive capital flows that are used to the benefit of other jurisdictions, via investment projects”.

Cayman Finance https://www.cayman.finance/, the local body representing the offshore sector, has described a recent Oxfam report on tax havens as “the same purposefully misleading rhetoric pretending to be research that Oxfam has published and republished for years”. Cayman Finance said the analysis was biased and “intentionally inaccurate and misleading information”, as it accused the global charity that has been helping the world’s poor and vulnerable people for well over 70 years of advancing an agenda and harming countries they do not ‘like’ in the process.

Cayman Finance CEO Jude Scott claimed that the Oxfam report was “alarmism” that was “unsupported by the facts”.

He said that international policymakers recognise the “vital role the Cayman Islands plays in the global economy”, as he advanced the idea that Cayman connects law-abiding users and providers of investment capital and financing around the world, which benefits both developed and developing countries.

“Oxfam continues to use a misleading and overly simplistic definition of what a tax haven is. Its assertion that a zero tax jurisdiction is a key criterion in defining a tax haven is simply not correct. Cayman Finance believes that any criteria used should be transparent, objective and meaningful,” Scott said. ‘Tax haven’ is a place providing shelter for illegal or inappropriate transactions and a jurisdiction that engages in practices that supports or conceals transactions relating to tax evasion, which is illegal. So, the Cayman Islands is not a ‘tax haven’, he said. “The Cayman Islands is an efficient and effective tax neutral jurisdiction that does not add additional taxes and has been recognised for decades as a strong partner in combatting global financial crime including money-laundering, terrorism financing, corruption and tax evasion. The Cayman Islands has gained the reputation of a transparent jurisdiction by meeting or exceeding globally accepted standards for transparency and cross border cooperation.” He said this jurisdiction provides a tax neutral platform that allows parties domiciled in countries that have differing laws, regulations, tax rules and customs to do business with each other.

Cayman on top of Offshore Merger deals again

Friday, October 21st, 2016

According to a report by a firm of international lawyers, Appleby, one third of all merger and acquisition deals in the offshore world in the first half of the year 2016 took place in the Cayman Islands.

Cayman retained its standing as the primary target of offshore transactions accounting for 40% of the value of that business. This was released by Appleby in its latest edition of Offshore-i, a report that analyses data on the activity in offshore financial centres.

While figures for the 1st 6 months of 2016 were down generally on what the lawyers said were “record-setting” figures in 2015 and both the number and value of offshore M&A deals fell, the Cayman Islands held on to the lion’s share of the deal volume and value.

Also, it was stated that the Cayman Islands was also home to 4 of the 10 biggest deals between the beginning of January and the end of June, including 3 in the technology sector, which enjoyed a particularly robust start to the year.

In the 1st 6 months of the year, the report claims, Cayman-incorporated companies were the target in 459 transactions worth a combined USD 41 billion. The value represented more than twice the amount of the next closest jurisdiction, the British Virgin Islands, while Hong Kong was second to Cayman in terms of deal volume with 263 transactions.

The largest deal targeting a Cayman company was the USD 4.5 billion investment in Cayman-incorporated software publisher Xiaoju Kuaizhi by a consortium including China Merchants Bank and other investors. Other significant technology deals in Cayman involved a USD 2 billion funding round for Cayman-incorporated Uber China and a USD 2 billion share buyback by Alibaba Group Holding Ltd.

While the 1st 6 months of the year 2016 saw a slowdown in completed IPOs across jurisdictions, a more positive story emerges when looking at future IPOs announced during this time period, the heavy majority of which involved a Cayman-registered company. Cayman was responsible for 102 of the 115 announced IPOs.

Despite the challenges faced by many offshore jurisdictions in the world at present, the offshore region is still ranked 6th in the world by deal volume and 4th for value activity. As the lawyers report stated, average deal size remains strong, and continuing from 2015, offshore still has the highest average deal size of any region worldwide.