Archive for November, 2009

Impact of Downturn revealed in Cayman Q2 Report. Part 2

Monday, November 30th, 2009

As discussed previously, the new statistics recently announced for economic activity in the Cayman Islands as at Quarter 2 2009 revealed further deterioration, which is the result of the global financial downturn.

The statistics showed that the Cayman Islands financial services sector went on bearing the brunt of the global financial shock in the 1st half of 2009. A downward trend was obserbed in total mutual fund licensees, listings on the stock exchange for mutual funds, specialist debt and international equity, bank and trust company licenses, and new company registrations. However, there was a growth in the captive insurance market, trust licenses, Eurobonds and stock exchange listings.

As regards banks and trusts in the Cayman Islands, they were negatively influenced by efficiency-driven global consolidations.

Europe and the United States are the main participants in Cayman’s banking industry – Europe accounts for 29.4% and the US for 27.5% of banking licensees. South America accounts for 16.4%; Asia and Australia – 10.0%; Caribbean and Central America – 7.8%; Canada and Mexico – 5.2%; and Middle East and Africa – 3.7%.

The combined net foreign assets of the Cayman Islands Monetary Authority (CIMA) and the domestic commercial banking sector improved by 9.6% year-on-year at Quarter 2 2009.

The number of Cayman insurance company businesses increased by 15 year-on-year at Quarter 2. At the end of June 2009, premiums for captive insurance reached USD 7.99 billion, which is an increase of about USD 350 million from June 2008.

Impact of Downturn revealed in Cayman Q2 Report

Wednesday, November 25th, 2009

The Cayman Islands has recently announced statistics for economic activity as at Quarter 2 2009. The new statistics revealed further deterioration, which is the result of the global financial downturn.

According to the newly published data, the overall fiscal deficit widened to KY$ 80.8 million (which is USD 98.5 million) in the 1st half of 2009 as compared to KY$ 1.6 million for the same period a year ago, as total expenditure grew by 10.4% and revenues fell by 13.7%

Direct revenues, which totaled KY$ 260.9 million, fell by KY$ 32.1 million or 10.9% below receipts in the preceding year, while indirect revenue amounted to KY$ 22.9 million, which is the decrease of 35.9%. With the only exception which is fines, all revenue sources declined, most notably taxes from international trade and transactions (-15.7%) and taxes on domestic property (-50.9%).

Capital expenditure and net lending increased significantly by 24.7% over the period June 2008 through to June 2009. There was a 1.8% rise in current expenditure precipitated by strong growth in personnel costs, interest payments, subsidies, and transfer payments.

Personnel costs increased to KY$ 123.4 million, which is higher by 8.3%as compared with a year ago.

As regards new company registration, at Quarter 1 2009, total new company registrations were at 3 679, which is a record 46.2% decline as compared with Quarter 1 2008.

Cayman signs TIEA with the Netherlands Antilles

Monday, November 16th, 2009

On October 29, 2009, the Cayman Islands signed a Tax Information Exchange Agreement (TIEA) with the Netherlands Antilles. The signing took place at the Caribbean Financial Action Task Force (CFATF) plenary held in Curacao.

This is the 14th Tax Information Exchange Agreement signed by the Cayman Islands. It was signed on behalf of the Cayman Islands by the Cayman Attorney General, Samuel Bulgin.

When commenting on the signing, Bulgin said: “This signing represents the Cayman Islands’ continued commitment to OECD standards for transparency and exchange of information on tax matters. It will commemorate the beginning of what I am sure will be a mutually-rewarding relationship between the Cayman Islands and the Netherlands Antilles.”

According to the government, negotiations on signing TIEAs have also been completed with Aruba, Australia, Canada, Germany, Italy and Mexico. Agreements are expected to be signed by the end of 2009. Also, negotiations are ongoing with Argentina, Belgium, China, Czech Republic, India, Japan, Korea, Portugal, Spain and South Africa.

Cayman Islands adopted new 2009 Constitution

Sunday, November 8th, 2009

The Cayman Islands have adopted the 2009 Constitution, which began a new chapter in the way the jurisdiction is governed. The new Constitution is said to bring more balanced governance in the shape of increased consultation and accountability in the running of Cayman.

After an extensive period of discussion and negotiations, as well as the 1st local Referendum, the new Cayman Islands Constitution was approved by Her Majesty Queen Elizabeth II. The 2009 Constitution entered into force on November 6, 2009.

Information on the constitutional changes is available on a modernized official website.