Archive for October, 2011

Cayman announces new tonnage tax regime

Thursday, October 27th, 2011

The Maritime Authority of the Cayman Islands (MACI) is introducing a new Annual Tonnage Fee (ATF) structure, to become effective on January 1, 2012.

With a view to remain competitive with other jurisdictions, a detailed investigation has been carried out by the Maritime Authority of its current ATF system. It particularly focus on comparison with the other key jurisdictions. The net result of this exercise will be a simplified and very competitive structure which provides 2 different formulations, one for merchant vessels and one for pleasure yachts, including those engaged in trade.

According to MACI, the new structure will benefit its clients as well as ensure that the Cayman Islands remain an attractive place for ship registration.

Captive Insurance Market grows in Cayman

Sunday, October 23rd, 2011

A 93%-increase in captive insurance company formations has been reported by the Cayman Islands Monetary Authority (CIMA) during the 1st 9 months of 2011, as compared to the same period in 2010.

CIMA published statistics revealing that a total of 29 captive insurance companies set up operations in the Cayman Islands during 2011, which is an increase from 14 in the 1st 3 quarters of 2010. This growth reflects the continued resilience of captive insurance sector in the Cayman Islands.

Total premiums breached records, which amounted to USD 9.6 billion as at September 30, a 12%-increase on that recorded at the end of 2010. Total assets have grown only marginally since the beginning of the year, to USD 58.3 billion.

According to CIMA’s Managing Director, Cindy Scotland, “This 93% increase in captive formations and close to USD 10 billion in premiums are indicators of the health of our captive insurance industry, despite the generally soft international insurance market conditions. In all of 2010 there were 25 new captives formed, so for our 2011 numbers to already be at 29, and with new applications pending, we anticipate this calendar year to reflect significant growth in new captives.”

It was noted by the statistics that the Cayman Islands has remained the leading jurisdiction for health care captives. As at September 2011, health care was the primary line of business for 256 companies (35%).

Cayman-Japan TIEA to enter into force

Saturday, October 22nd, 2011

A tax information exchange agreement (TIEA) between the Cayman Islands and Japan will come into effect November 13, 2011 as the two governments have completed necessary domestic procedures.

On October 14, Japan notified the Cayman Islands of the completion of its internal procedures necessary for the entry into effect of the agreement. On the same date, the Japanese Embassy in the UK received a similar notification from the Cayman Islands.

The tax treaty was signed February 7 with a view to prevent international tax evasion between the Cayman Islands and Japan.

The British territory in the Caribbean is the 4th offshore tax haven that Japan has concluded such a treaty with. Previously, Japan signed tax agreements with the Isle of Man, the Bahamas, and Bermuda.

Cayman defends itself against secrecy findings

Saturday, October 15th, 2011

It has been discussed that a recent report named the Cayman Islands the world’s 2nd most secretive finance jurisdiction. This has led Cayman industry insider to call for a better defence against “those who would bury places like Cayman”.

The ex-chairman of the Cayman Islands Monetary Authority (CIMA), Tim Ridley has spoken to comment on the publication of the Tax Justice Network ‘s (TJN) Secrecy Index that accused the offshore jurisdiction of making “shallow efforts” in cracking down on fiscal evasion.

Mr Ridley said: “The recent, highly subjective and somewhat ‘short on substance’ secrecy report by the Tax Justice Network underscores how essential it is that Cayman presents the accurate position whenever and wherever possible and to those that matter”. He stated that “those who would bury places like Cayman are in deadly earnest”, so the future of Cayman financial services industry is at stake.

Carlos de Serpa Pimentel, chairman of STEP Cayman Islands, suggested that the Cayman Island’s dealings as an offshore jurisidiction actually helped the world’s economy by providing a tax neutral platform for international transactions. “In other words, the existence of Cayman facilitates the workings of the world’s financial system and makes it more efficient,” he said.

British tax activists accuse Cayman of being best tax haven

Sunday, October 9th, 2011

According to British newspaper Morning Star, tax activists drew their attention to the Cayman Islands. They demanded that Britain bring the jurisdiction, which they called one of the world’s biggest tax havens, to account.

The Tax Justice Network’s financial secrecy index said that the Cayman Islands is one of the world’s most secretive financial centres. The jurisdiction is one of British Overseas Territories having economic autonomy. According to Morning Star, income or corporate taxes has made them the hedge fund capital of the world, with more than 90 000 companies doing their business through this offshore jurisdiction. A study of 72 countries revealed that the Cayman Islands is the 2nd most secretive nation (the 1st is Switzerland).

On October 4, a separate report was released that accused the offshore jurisdiction of playing a “key role” in the 2008 global financial crisis. The report said: “Cayman’s relaxed funds law served as the bedrock of the hedge fund industry which now sees Cayman as its top domicile. It also saw Cayman attract a very large share of major new sectors in financial engineering such as private equity, debt and bond issues and securitisation”.

In February 2011, Barclays admitted to using Cayman subsidiaries to slash its tax bill to 1%. Barclays chief executive Bob Diamond said that the bank had used at least 181 offshore subsidiaries in the Cayman Islands to cull its tax burden to just GBP 113 million despite racking up GBP 11.6 billion in annual profits.

Cayman and China sign Tax Treaty

Wednesday, October 5th, 2011

It has been announced by the Cayman Islands that the offshore jurisdiction has entered into an agreement on sharing tax information with China.

On September 26, the signing ceremony was held. At the event, the Cayman Islands’ Premier, McKeeva Bush said that signing this Tax Information Exchange Agreement is a significant step in enhancing the relationship between the Cayman Islands and China. He noted that China is one of the fastest growing economies in the world, so he expressed his confidence that this TIEA will contribute positively to economic activity between the two jurisdictions.

Bush said: “This is 26th signed agreement for exchange of information for tax purposes, and the People’s Republic of China has become another member of the G20 countries to have a TIEA with the Cayman Islands.”

Bush co-signed the agreement with Song Lan, the State Administration of Taxation Deputy Commissioner and Vice Minister. Both parties must conclude their individual ratification procedures before the agreement enters into force.

Cayman governor rejects visa-waiver proposal for Jamaicans

Saturday, October 1st, 2011

A request from the government for an across the board visa waiver for Jamaicans coming to the jurisdiction has been rejected by Governor Duncan Taylor.

According to a statement issued by the Office of the Governor, Cabinet had considered a proposal to ease the visa requirements for Jamaican nationals with a view to make it easier for children and the elderly to enter the Cayman Islands. The proposal could also foster business visitor travel from Jamaica. The government had recommended to remove the existing requirement to obtain a visitor’s visa for Jamaicans wishing to visit the Cayman Islands who are under the age of 15 years or over the age of 70 years or in possession of a valid Canadian, UK or US visa.

The statement said that the Governor was content on the first 2 points, however, he did not agree to the visa requirement being waived across the board for those Jamaican citizens holding valid Canadian, UK or US visas. He said: “I know that the vast majority of Jamaicans are law-abiding citizens. This includes residents who make a positive contribution to our society and economy in the Cayman Islands; and short-term visitors, including business visitors, whose visits are welcome and trouble free. There is, unfortunately, a small minority who has the potential to cause problems”. Taylor noted: “The Cayman Islands Immigration Department does not have the capability to determine whether such a visa is genuine or not and the respective countries have indicated that they are unable to provide the Cayman Islands with the access to the resources on which they rely to make these determinations.”

Taylor said that the introduction of a visa regime for Jamaicans in 2005 led directly to a significant reduction in the involvement of Jamaicans in crime in Cayman. He added: “Lifting the visa requirement as proposed could potentially allow unscrupulous Jamaican visitors to gain entry to the Islands using forged or counterfeit visas which could have a significant negative impact on the security of the Cayman Islands”.