Cayman Islands Financial Services

The implementation of a pending tax agreement (TIEA) with the Cayman Islands has been announced by the Indian Income Tax Department. The TIEA will provide both tax authorities with access to tax information on request as soon as the agreement has entered into force. The document was signed on March 21, 2011.

The completion of India’s domestic ratification procedures with the publication of Notification 61/2011 in the nation’s official gazette means that the bilateral TIEA entered into force immediately, on December 27, 2011.

In accordance with the agreement that was negotiated on the basis of the OECD model agreement, Cayman or Indian authorities may request information pertaining to taxation where there is sufficient evidence of the perpetration of fiscal crime.

In his New Year’s address, McKeeva Bush, the Premier of the Cayman Islands, has noted that the jurisdiction is planning attract additional investment as a result of the Cayman Enterprise City – the 1st special economic zone in the Caribbean. This means that companies will be admitted this month.

According to Bush, the Cayman Enterprise City has made a noticeable progress since the signing of a Memorandum of Understanding between the government and the organisers 11 months ago.

Bush said that the extraordinary progress by CEC stakeholders has meant that the CEC zone is now operational. In September 2011, the Special Economic Zones Law was passed by the legislative assembly. The 1st meeting of the Special Economic Zone Authority was held in the end of December. It has confirmed that it is prepared to license the 1st zone companies in January 2012.

Investors located in the zone have the following benefits:
• exemptions from income tax;
• exemptions from corporate tax;
• exemptions from capital gains tax;
• exemptions from tax on the repatriation of capital and profits;
• exemptions from work permits;
• companies will be permitted to be 100% foreign owned.