Archive for October, 2012

Cayman Islands monitoring FATCA Developments

Friday, October 26th, 2012

The government of the Cayman Islands has released an update on whether the territory will negotiate a government-to-government reporting arrangement with the United States in order to ease the compliance burden on local financial institutions of complying with the requirements of the US’s Foreign Account Tax Compliance Act (FATCA).

FATCA was enacted by US Congress in March 2010. It will require foreign financial institutions to disclose information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest. Failure by a foreign financial institution to disclose information would result in a requirement to withhold 30% tax on US-source income. Presently, it is anticipated that foreign financial institutions will only need to begin reporting income received by these clients by January 1, 2016, in respect of the calendar year 2015. Despite the lengthy transitional period envisaged, foreign financial institutions have warned of the substantial compliance burden attached to the reporting requirements.

Earlier, the US and France, Germany, Italy, Spain and the UK collaborated on the negotiation of a landmark inter-governmental agreement, designed to allow relevant information to be transmitted to US authorities via a centralized authority in each nation. Negotiations are advanced between the US Treasury, Japan and Switzerland, towards another, adapted agreement. The first inter-governmental agreement was drawn up to establish a benchmark pact, to allow other nations to negotiate broadly similar arrangements with the US.

The Cayman Premier, McKeeva Bush, said: “The government is keeping track of the discussions surrounding FATCA, and evaluating both information and dialogue in order to make the best choice for our jurisdiction regarding a reporting arrangement,” he said. “We will be in a position to decide on the best way forward once the Model 2 Intergovernmental Agreement [involving Switzerland and Japan] is published and we have been able to fully evaluate all the options.”

The jurisdiction’s premier also noted: “As government continues this process, it is encouraging that foreign financial institutions in the Cayman Islands are moving ahead with their particular preparations, in accordance with US requirements.”

Cayman is 2nd leading European Specialist Finance Centre

Friday, October 12th, 2012

The Cayman Islands was placed 1st in Europe in the latest rankings of specialist finance centres published annually by trade title, The Banker.

It was 2nd only to Guernsey which maintains its 1st position from 2011. Jersey was 4th.

The rankings are based on data that was supplied by each jurisdiction on the value of their respective financial services sectors as at the end of 2011.

Cayman Islands is 44th in Financial Centre Rankings

Monday, October 1st, 2012

According to the latest Global Financial Centres Index published biannually by the Z/Yen Group, the Cayman Islands is 44th offshore jurisdiction.

London remains in 1st place in the rankings. It is followed by New York, Hong Kong, Singapore and Zurich.

As to other popular offshore jurisdictions, Guernsey is 28th place, the Isle of Man is 40th, the British Virgin Islands is 45th, while Bermuda takes 46th position.

The latest report, GFCI 12, says that, in general, offshore centres suffered significant reputational damage during and in the wake of the financial crisis but now they are starting to make up the lost ground.