The Cayman Islands

 Location 

The Cayman Islands is a group of islands lying in the Caribbean Sea 475 miles south of Miami, Florida and 200 miles west of Montego Bay, Jamaica.  The capital and business centre is George Town which is located on Grand Cayman, the largest of the three islands, the others being Cayman Brac and Little Cayman.  The Islands have a total land area of approximately 100 square miles.

The Islands' Success Story

Christopher Columbus discovered the islands in 1503 during his fourth and last voyage to the New World. British possessions under Treaty of Madrid in 1670, the islands were for centuries, politically linked to Jamaica. When Jamaica attained independence in 1962, the Cayman Islands opted to remain a British Crown Colony, now classified as a British Dependent Territory.

In the 1960s the islands were still quiet, undeveloped and mosquito infested, and certainly not the major tourist destination that they are today. As we approach the 21st century, the situation is a very different one, with the Cayman Islands being considered one of the leading offshore financial jurisdictions in the world and home to 47 of the world's top 50 banks. The population of the Cayman Islands enjoys a high employment rate and a per capita income that ranks among the highest in the world.

In recent years, there have been a number of significant developments in the financial environment, including the formation of the Cayman Islands Monetary Authority and the establishment of the Cayman Islands Stock Exchange ("CSX") in 1997. The CSX is now one of the fastest growing stock markets in the world, offering listing facilities for offshore mutual funds. This growth and development in the financial services industry is actively encouraged with an emphasis on maintaining its excellent reputation and good regulation.

The islands benefit from an absence of taxes, a stable political and economic environment, excellent communications, international and highly rated professional finance facilities and modern legislation, all of which have contributed to the success of the Cayman Islands as a centre for offshore financial services. The islands are justifiably proud of their continuing success.

Constitution and Government

The Constitution gives executive and legislative power to a Governor, an Executive Council and a Legislative Assembly.  The islands enjoy a large measure of self-government, with Britain retaining responsibility for defence and external affairs.

The Governor, appointed by the British Crown, is responsible as head of government for the administration of the islands.  The Executive Council dictates government policy and consists of the Governor, three senior civil servants plus five of the elected members of the Legislative Assembly.  Legislation is formulated by the Executive Council and passed by the Legislative Assembly which consists of the Speaker, who presides at meetings, the three senior civil servants who are members of the Executive Council and fifteen elected members.  Elections to the Legislative Assembly take place every four years. 

Political and Economic Stability

The Cayman Islands are seen as among the most politically and economically stable islands in the Caribbean. With the very low unemployment rates and high standard of living, the islands are an attractive jurisdiction for foreign entities and individuals looking for a stable and developed offshore centre. The islands enjoy a substantial trade surplus largely thanks to the finance industry and tourism. Economic stability combined with political stability, enable the Cayman Islands to maintain their favourable economic situation.

In 1992 the Caribbean Financial Action Task Force ("CFATF") was established to combat money laundering. The Financial Secretary, appointed by the Governor, is the Chairman of CFATF. Following from the islands' pro-active approach to preventing criminal activities, the Proceeds of Criminal Conduct Law was enacted in 1996 and has been seen as an important milestone towards securing the trust and respect of the international community. Growth in the financial industry is welcomed, but it is quite clear that it has to be legitimate and questionable transactions will not be tolerated.

Legal System

The Law of the Cayman Islands is derived from English Common Law and is supplemented by local statutes.  Modern company and trust statutes have been enacted together with legislation to control the activities of banks, trust companies, mutual funds and insurance business.

Language

English is the official and spoken language.

Communications

There are daily jet service links between Grand Cayman and Miami.  Air services are also maintained with Kingston, Jamaica, several other major United States cities as well as the United Kingdom.  International direct dialing facilities for telephone, facsimile and electronic communications are excellent and the postal service is efficient. 

Exchange Control 

There is no Exchange Control.

Currency

The medium of exchange is the Cayman Islands Dollar, which is tied to the United States Dollar at the fixed rate of CI$1 =US$1.20.

Taxation

There are no direct taxes on individuals or corporations.  Government revenue is earned from custom duties, stamp duties and licence fees.

Legal and Accounting

There are a number of law firms fully conversant with the licensing and corporate aspects of insurance companies, trusts and mutual funds and all the major international accounting firms are represented in the islands.