Archive for August, 2013

Cayman and United States conclude FATCA Negotiations

Thursday, August 15th, 2013

The Government of the Cayman Islands announced that it has concluded negotiations with the United States on a Model 1 intergovernmental agreement (IGA), and a new tax information exchange agreement (TIEA).

Both agreements pave the way for automatic exchange of information under the US Foreign Account Tax Compliance Act (FATCA).

The governments have initialed the agreements with a view to indicate their intent to sign them. It has also been noted that the official signing will be held as soon as possible. When the documents are signed, their texts will be publicly available.

The Model 1 IGA is beneficial for foreign financial institutions in the Cayman Islands because it will streamline, through the Cayman government, the reporting of information regarding accounts and non-financial entities substantially owned by United States citizens and residents. The Cayman government will relay the information to the US Internal Revenue Service.

Cayman’s Minister for Financial Services Wayne Panton said “As an international financial center that contributes to the efficient functioning of global markets, the initialling and subsequent signing of the IGA and new TIEA with the United States will again demonstrate Cayman’s commitment to engage in globally accepted tax and transparency initiatives”.

Following the signing with the United States, the Cayman Islands will have further discussions with the UK’s HM Treasury to finalize the terms of the UK Model 1 IGA FATCA agreement.

Offshore Company Formations slowed 10% in Cayman Islands

Wednesday, August 7th, 2013

The majority of offshore jurisdictions experienced a decline in company incorporation activity in the 2nd half of 2012 as compared with the 1st half, according to the Applebly Group.

According to the report, taking the entire year into account, the overall number of new company incorporations for the majority of jurisdictions stayed flat in 2012, which proved to be a year of consolidation following large increases in annual new incorporations between 2009 and 2011.

As to the data on the Cayman Islands, the report noted that the Cayman company formations are steadily returning to their pre-recession peaks, experiencing a 1% increase.

One of the report’s key findings in the 2nd half of 2012 is that overall volumes of new offshore companies being registered were 11% lower in H2 2012 than the preceding 6 months. After a busy 1st half of the year, jurisdictions including the Cayman Islands as well as the Isle of Man, Mauritius, and the BVI were approximately 10% down in the latter half.
The report revealed that the British Virgin Islands continues to dominate offshore new company formation activity by volume. The Cayman Islands is its nearest comparator, but the BVI has consistently maintained a 6-fold lead ahead of it.