Offshore Finance Industry is important to Cayman

March 30th, 2017

Jude Scott, the CEO of Cayman Finance, said that the offshore financial services sector is important to everyone in the Cayman Islands and not just those making a direct living from it.

In Order to get the understanding by the local community at a time when the industry continues to come under attack, not just from overseas but more recently at home as a result of the Legal Practitioners Bill, Cayman Finance has launched a local awareness campaign about the sector.

“The financial services industry has such a positive impact on our community,” Scott said. “We understand it can sometimes be difficult for members of the wider community to see the positive influence the industry has on all residents, but the industry accounts for more than 50% of government revenue – that’s in excess of $300 million each year – which helps to fund education, healthcare, infrastructure, charities and more.”

The finance industry employs over 5,000 people including more than 2,700 Caymanians. And it is not just lawyers, accountants, but also IT and marketing professionals. Also, the finance sector buys services from large, medium and small businesses in other industries in the Cayman economy helping to create jobs indirectly.

Hoping to raise awareness about what the financial services industry does and its impact on the wider community and economy Cayman Finance will be giving presentations to various organisations, associations and businesses within different sectors.

Cayman Premier in London to promote offshore sector

March 1st, 2017

Premier Alden McLaughlin will be promoting the Cayman Islands, including its offshore sector, in London.

The delegation left on March 1 and will return to Grand Cayman on March 8, 2017.

Premier has been invited to deliver an address at a conference at Blackstone Chambers, entitled, “Current Issues in Rule of Law and International Trade and Development”. Also, he will be attending the event hosted by the well-known barristers chambers, to meet with the overseas territories minister, Baroness Anelay, and other British officials.

The conference will be chaired by Blackstone Chambers’ Sir Jeffrey Jowell QC, who advised the PPM during the shaping of the Cayman Islands 2009 constitution. Other guest speakers include Michael Llamas, Attorney General of Gibraltar; Justice Angelica Nussberger, Section President and German Judge on the European Court of Human Rights; and Justice Catherine O’Regan, former member of the Constitutional Court of South Africa and Director of the Bonavero Institute of Human Rights at Oxford.

According to McLaughlin, the conference would give him “an opportunity to say what the Cayman Islands has done in respect of having an advanced bill of rights, an independent judiciary, anti-corruption provisions and how our government has worked to enact and enforce laws against money-laundering and tax evasion”.

LA to tackle a dozen offshore laws

February 22nd, 2017

The financial services minister will be dominating the legislative agenda of the Legislative Assembly with almost a dozen offshore laws set to be debated by legislators ahead of evaluation by the Caribbean Financial Action Task Force (CFATF) later in 2017. The Government of the Cayman Islands is expected to deal with a significant amount of business over the next few weeks before the LA is prorogued ahead of Nomination Day next month and the formal launch of the campaign for the General Election.

Wayne Panton’s ministry has prepared eleven bills, mostly relating to the regulatory framework surrounding new financial services vehicles, and to improve the business environment. Laws such as the Companies Management (Amendment) (No. 2) Bill, 2017; the Companies Amendment (No. 2) Bill, 2017; and the Limited Liability Companies (Amendment) Bill, 2017 are related to creating the framework for the internal beneficial ownership registers in line with Cayman’s beneficial ownership information exchange agreement with the United Kingdom.

Laws such as the Cayman Islands Limited Liability Partnership (LLP) Bill, 2017, which introduces a new business structure designed to increase the attractiveness of the Cayman Islands to professional service providers, are designed to support new financial services vehicles. The Foundation Companies Bill, 2016 is designed to introduce a new type of company that that offers trust and estate planners to what was described as a more satisfactory structure.

The Limited Liability Companies (Amendment) (No. 2) Bill, 2016; the Trusts (Amendment) Bill, 2016; the Exempted Limited Partnership (Amendment) Bill, 2016; and the Tax Concessions (Amendment) Bill, 2016 are designed to delegate the authority of Cabinet to the Cabinet Office for processing tax concession certificates.

Also, the minister is bringing an amendment to the Trade and Business Licensing Law to clarify and extend the Trade and Business Licensing Board’s functions and exemptions for the agricultural sector and to remove the requirement for police clearance certificates for those with an interest in listed or regulated companies, provide proper classification for pay day loans, and allow utility bills to be substituted for bank references.

Last, but not least, and certainly the most controversial, is the Legal Practitioners Bill, 2016, which was deferred for further public consultation from the last meeting. Intended to modernise the regulation of the practice of law, it will also address the Financial Action Task Force (FATF) recommendations ahead of the assessment.

The bills, which can all be found on the government gazette’s website, are as follows:

– the Companies Management (Amendment) (No.2) Bill, 2017;
– the Companies Amendment (No. 2) Bill, 2017;
– the Limited Liability Companies (Amendment) Bill, 2017;
– the Cayman Islands Limited Liability Partnership Bill, 2017;
– the Foundation Companies Bill, 2016;
– the Limited Liability Companies (Amendment) (No. 2) Bill, 2016;
– the Trusts (Amendment) Bill, 2016;
– the Exempted Limited Partnership (Amendment) Bill, 2016;
– the Tax Concessions (Amendment) Bill, 2016;
– the Legal Practitioners Bill, 2016;
– the Trade and Business Licensing Amendment Bill, 2017.

US treasury secretary nominee advised to eliminate Cayman Islands and other tax havens

January 25th, 2017

When questioning the new Trump administration nominee for Treasury Secretary, members of the US Senate, asked Steve Mnuchin how he intends to close down Caribbean tax havens, specifically naming the Cayman Islands.

The senators focused upon the Cayman Islands in showing their displeasure of what they clearly indicated was abuse of American tax laws.

Details have recently emerged how financial service professionals working in the Cayman Islands intentionally use combinations of jurisdictions, like forming a BVI company, owned by a Belize trust, to create a totally opaque, non-transparent vehicle, tax-free, with no identifiable beneficial owner.

After the Panama Papers scandal, members of the Senate and the House of Representatives have affirmed the immediate need for effective tax reform, whether through new legislation or Treasury regulations, to eliminate the present situation. They appear to be looking for the incoming Treasury Secretary for a solution. Political pressure is clearly present on this matter.

Switzerland to implement AEOI Agreement with Cayman

January 3rd, 2017

The Swiss Federal Department of Finance (FDF) has launched a consultation on the introduction of the automatic exchange of information (AEOI) in tax matters with a series of countries including the Cayman Islands.

Besides the Cayman Islands, the countries to implement AEOI agreements include such jurisdictions as the Seychelles, the British Virgin Islands, Bermuda, the Faroe Islands, Mexico , etc.

The consultation will run until March 15, 2017. The AEOI with these countries is to enter into force on January 1, 2018, with the first exchanges to take place in 2019.

Switzerland expects that extending the network of AEOI partner states will help strengthen the competitiveness, credibility, and integrity of Switzerland’s financial center.
Switzerland to implement AEOI Agreement with Cayman

The Swiss Federal Department of Finance (FDF) has launched a consultation on the introduction of the automatic exchange of information (AEOI) in tax matters with a series of countries including the Cayman Islands.

Besides the Cayman Islands, the countries to implement AEOI agreements include such jurisdictions as the Seychelles, the British Virgin Islands, Bermuda, the Faroe Islands, Mexico , etc.

The consultation will run until March 15, 2017. The AEOI with these countries is to enter into force on January 1, 2018, with the first exchanges to take place in 2019.

Switzerland expects that extending the network of AEOI partner states will help strengthen the competitiveness, credibility, and integrity of Switzerland’s financial center.

New Cayman finance bill proposes more reporting

December 27th, 2016

The Government of the Cayman Islands has gazetted a list of amendments to the Public Management and Finance Bill that covers important changes when it comes to the reporting of how government is spending public cash. The Public Management and Finance (Amendment) (No. 2) Bill, 2016 is expected to be debated in the Legislative Assembly when it meets again in January 2017 and the new law will see government departments reporting their financial circumstance to parliament on a quarterly basis.

The amendment bill is now open for public discussions. It is aimed to provide a clear and simple process for pre-election financial updates and government unaudited quarterly reports that can be presented to the LA and to streamline the provision of annual reports.

The bill covers changes to transactions where no appropriation is required for improving transparency, and the proposed bill aims at more clearly defining the functions of the minister of finance, the financial secretary, the chief officer of finance and the director of internal audit, chief financial officers, and other senior public officials involved in the financial aspects.

Finance Minister Marco Archer spoke recently about his desire to pay off more of government’s debt in addition to the regular payments being made. However, paying more off a debt would see Cayman lose control of its finances again, which Archer has said is a significant barrier to improving the governments financial situation.

Cayman Economy grows by 3%, surpassing predictions

December 20th, 2016

Statistics released by Cayman Islands Government indicates that the local economy grew by around 3% in the 1st 6 months of 2016, surpassing predictions and reflecting the best growth rate in the country since before the economic crisis.

The forecast GDP growth for 2016 has now been adjusted from the expected 2.1% forecast by the finance minister during the budget to 3% because of the improved performance in the 1st part of the year. The government purse is also fuller than expected as the stronger economy has boosted revenue by 9.7%.

According to the latest numbers from the Economics and Statistics Office, the Cayman Islands Government expects to end the fiscal year with a surplus of $127.5 million, which is 10.8% higher than the CI$115.1 million the administration achieved in 2015. The finance ministry has also been getting on top of the government’s debt, which at the end of June was down 3.7% from last year to CI$501.3 million.

Following the release of the figures, Finance and Economic Development Minister Marco Archer said: “I am pleased to note that growth in the first half of 2016 improved on the 1.3% growth for the same period in 2015”. He added that it also exceeds the initial GDP forecast for the year of 2.1%, and is the highest growth rate since 2007.

The main boost to the economy, however, may be bad news for the environment as it is based on a growth in construction, quarrying and consumption. The semi-annual growth was due in large part to an 11.4% growth in construction, while wholesale and retail trade grew by 7.6%.

Growth in the financial services sector, which still accounts for the bulk of Cayman’s earnings, was considerably more modest. Financing and insurance services grew by 3.6%, which the ESO said down to the domestic lending activity of commercial banks rather than the offshore industry. While visitor numbers are still growing, the hotel and restaurant sector declined by just over 1%.

The GDP estimate for 2015 shows that the local economy was where the growth was concentrated. “The 2.8% growth exceeded the 2% advance estimate for the year based on early indicators,” Archer said. “Moreover, it was broad-based as all sectors in the economy turned in positive growth rates. This augurs well for the increased diversification of our economic base.”

Cayman listed as 2nd worst tax haven

December 13th, 2016

The Cayman Islands has been listed as one of the worst corporate tax havens in the world in a new report examining the impact that tax-dodging corporations have on the world’s poorest people. Published by the international charity Oxfam, the report lists Cayman in second place behind Bermuda because of the zero-rated corporate income tax and what the charity said is a lack of cooperation with international efforts against tax avoidance.

But Oxfam stated in the report that there is a destructive race to the bottom on corporate tax.

Also, it said that the growth in the use of tax havens means countries are finding it harder and harder to tax income from capital. Government coffers are declining and the burden of tax has shifted toward poorer workers and small businesses and away from powerful conglomerates and the world’s high net worth individuals.

Oxfam names on-shore countries as well as offshore financial centres, such as Cayman and Bermuda, but the charity is calling on world governments and corporations to facilitate much more transparency over who owns what and who pays tax where on their earnings and profits. The charity also raised concerns that in the country-by-country reporting between government authorities the information is still not public. This means developing countries cannot access the data.

Responding to this latest critical report, Financial Services Minister Wayne Panton accused Oxfam of making errors on its list and of exploiting misinformed public opinion, as part of an agenda to influence the public policy of G20 countries.

Panton said that the report “may be detrimental to the overall shared goal of combating criminal behaviour and addressing income inequality”. He claimed that Oxfam’s overriding error is their failure to differentiate between capital flows and profit shifting.

To engage in profit shifting, a jurisdiction must attract significant multinational corporations, or MNCs, he explained. “Cayman does not have this type of business. We do, however, receive capital flows that are used to the benefit of other jurisdictions, via investment projects”.

Cayman Finance https://www.cayman.finance/, the local body representing the offshore sector, has described a recent Oxfam report on tax havens as “the same purposefully misleading rhetoric pretending to be research that Oxfam has published and republished for years”. Cayman Finance said the analysis was biased and “intentionally inaccurate and misleading information”, as it accused the global charity that has been helping the world’s poor and vulnerable people for well over 70 years of advancing an agenda and harming countries they do not ‘like’ in the process.

Cayman Finance CEO Jude Scott claimed that the Oxfam report was “alarmism” that was “unsupported by the facts”.

He said that international policymakers recognise the “vital role the Cayman Islands plays in the global economy”, as he advanced the idea that Cayman connects law-abiding users and providers of investment capital and financing around the world, which benefits both developed and developing countries.

“Oxfam continues to use a misleading and overly simplistic definition of what a tax haven is. Its assertion that a zero tax jurisdiction is a key criterion in defining a tax haven is simply not correct. Cayman Finance believes that any criteria used should be transparent, objective and meaningful,” Scott said. ‘Tax haven’ is a place providing shelter for illegal or inappropriate transactions and a jurisdiction that engages in practices that supports or conceals transactions relating to tax evasion, which is illegal. So, the Cayman Islands is not a ‘tax haven’, he said. “The Cayman Islands is an efficient and effective tax neutral jurisdiction that does not add additional taxes and has been recognised for decades as a strong partner in combatting global financial crime including money-laundering, terrorism financing, corruption and tax evasion. The Cayman Islands has gained the reputation of a transparent jurisdiction by meeting or exceeding globally accepted standards for transparency and cross border cooperation.” He said this jurisdiction provides a tax neutral platform that allows parties domiciled in countries that have differing laws, regulations, tax rules and customs to do business with each other.

Schwarzenegger to star at Cayman investment conference

November 23rd, 2016

Arnold Schwarzenegger will be visiting the Cayman Islands in February 2017 as the keynote speaker for the Cayman Alternative Investment Summit (CAIS).

The American-Austrian action movie star and former California governor, Schwarzenegger left politics in 2011 but he continues to be an advocate of sustainable energy and was a leading voice at the Paris climate conference last year.

When he comes to Cayman, Schwarzenegger will join what organisers of the CAIS”.

Other special guest speakers are Mark and Scott Kelly, twin astronauts who are helping NASA study the impact of long-duration space flight; George Whitesides, the CEO of Virgin Galactic, the world’s first commercial spaceline; Mike Abrashoff, a former Navy general famed for transforming the worst-performing ship in the Navy’s Pacific Fleet into the best-performing ship; and David McWilliams, a renowned Irish economist, writer, broadcaster and journalist.

Cayman to have another great year for tourists

November 20th, 2016

At the end of September almost 300,000 overnight guests had already visited Cayman this year, setting the tourism sector on track for another great year.

2015 was the best year since the Department of Tourism began keeping official records and this year is likely to come very close to those numbers. Speaking at the Cayman Islands Tourism Showcase 2016, Tourism Minister Moses Kirkconnell said that he believed the numbers in 2016 will exceed the 385,378 guests that came to Cayman Islands in 2015.

There were breaking arrivals for June and July, so Kirkconnell said the “tremendous growth” in the sector is continuing despite fierce competition. According to him, the government of the Cayman Islands had to keep the tourism momentum going as the economy is still heavily dependent on the sector, which provides some 12,000 jobs, or a quarter of the labour force.

The minister also spoke about the progress on the enhancement of the airport, which, in contrast to the cruise port, has much broader support across the entire community.