Cayman
Islands Geography
The Cayman Islands comprise three islands
situated in the Western Caribbean, 150
miles south of Cuba. The islands, Grand
Cayman, Cayman Brac and Little Cayman
cover an area of 100 sq miles together.
They consist of limestone outcroppings
which are the tips of a submarine mountain
range called the Cayman Ridge and extend
off Cuba's southeast coast to the Misteriosa
Bank near Belize. There are no rivers
due to the porous limestone rock, although
this accounts for the transparency of
the surrounding Carribean Sea, often to
over 120ft.
Grand
Cayman is the largest of the three islands
and measures 22 miles in length and 8
miles at its widest point. The islands
are surrounded by coral reefs which create
ideal conditions for divers and anglers.
Cayman Brac is the most scenic island
with a large bluff rising west to east
along the island and rising to 140 feet
at the eastern tip, ending in a sheer
cliff. The island is only 12 miles long
and slightly over a mile wide.
The
climate is warm and humid although cooled
by trade winds. Temperatures reach between
80-90F during the day in summer and 72-86F
in winter. The average rainfall is 46
inches with May and October being the
wettest months.
There
are international airports on Grand Cayman
and Cayman Brac, with in the region of
nine major airlines serving US and European
cities. A direct flight from Miami to
Cayman (daily) takes just over one hour.
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Cayman Islands Population, Language and
Culture
The population is estimated at 51,384 (2011
est). The majority live on Grand Cayman
with about 1,200 people on Cayman Brac and
only about 120 on Little Cayman. The capital
is George Town, on Grand Cayman. Just over
a third of the population are non-Caymanians,
from 113 different countries. English is
the official language with a brogue reflecting
Welsh, Scottish and English origins. Jamaican
patois is also common among the substantial
part of the population that has immigrated
from Jamaica.
The
islands were discovered by Columbus in May
1503. He named them "Las Tortugas" after
the abundance of sea turtles. On a voyage
between 1585-86, Sir Francis Drake visited
the islands and re-named them The Cayman
Islands after the local word for crocodile.
In
1655 Cayman officially became part of the
British Empire under the Treaty of Madrid
and for the next 300 years the islands were
administered as a dependency of Jamaica.
King George III granted the Cayman Islands
freedom from taxation after the courageous
rescue of ten merchant vessels in the Royal
fleet which ran aground in rough seas on
8 February, 1794.
The
Caymanians are more of a maritime people
than many Caribbean nations; having few
native inland resources they have tended
to live from the sea, and are good sailors.
Perhaps this is why recreational scuba diving
is said to have originated on Cayman; now
it is a staple of the islands' pervasive
tourist industry.
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Cayman Islands Government
When Jamaica became independent in 1962,
the Cayman Islands chose to remain a British
Crown Colony. Under the Constitution established
in 1972 Cayman is a British Dependent Territory,
with a Governor appointed by the Queen for
a term of 4 years. There is an Executive
Council consisting of three official members
appointed by the Governor and five elected
members selected from the 15 elected representatives
of the Legislative Assembly. Elections are
held every four years, most recently in
2009.
In
the 2009 elections, the United Democratic
Party, or UDP, led by McKeeva Bush, returned
to power after a five-year absence, sweeping
away the government of Kurt Tibbetts, winning
nine out of the fifteen seats. While Tibbetts
was in favour of a referendum on independence,
in 2008 discussions began between the governments
of the Cayman Islands and the UK on a new
constitution for the jurisdiction. This
constitution seeks to strengthen self governance
in the Cayman Islands, while retaining strong
links to the UK. Agreement has been reached
on key issues, such as increasing cabinet
representatives from five to seven and the
Legislative Assembly from fifteen to eighteen,
adding a Minister of Finance as a Cabinet-level
position, with the Financial Secretary retained
in an advisory role, and establishing a
National Security Council (to handle policy
matters surrounding national security issues)
and a Judicial and Legal Services Commission
to appoint the Attorney General and other
key legal and judicial officials.
The
Cayman Islands voted to adopt a revised
constitution by a referendum held on May
20, 2009.
An
amendment to the constitution in 1994 paved
the way for a new ministerial form of government.
The five elected members of the Council
are now referred to as Ministers with portfolio
responsibilities assigned by the Governor.
A District Commissioner represents the Governor
in the two sister islands. Government offices
are located in George Town.
Attending
a CARICOM meeting in July, 2005, Kurt Tibbetts,
then Leader of Government Business of the
Cayman Islands, said that his country will
keep its current relationship with the Community.
Cayman has associate membership of CARICOM.
It did not sign the Treaty of Chaguaramas
in 1973 and does not participate in voting
although its representatives attend CARICOM
meetings with observer status.
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Cayman Islands Economy and Currency
The
prosperous Cayman Islands economy is dominated
by tourism (70% of GDP) and financial services.
The standard of living is one of the highest
in the region; unemployment was 4% in 2008
and rose to 6% in 2009 a further rise to
6.7% was recorded in 2010.
The
upmarket Cayman tourist industry attracted
1.8m people in 2008, largely from the US.
Cruise ship visitors make up a significant
proportion of the total. The number of cruise
ship passengers in 2010 increased by 8.2%
compared to the previous year.
The
Government has worked for 25 years to develop
Cayman into a top financial jurisdiction,
assisted by the fact that Cayman has never
had any kind of taxation (stamp duty, import
duties and registration fees being the only
exceptions). Banking, insurance, trust management
and mutual funds are the key sectors making
up the financial services industry. More
than 92,000 foreign companies are registered
in Cayman. The financial sector is regulated
by the independent Cayman Monetary Authority.
Cayman
has tried hard to legislate away doubtful
business based on drugs or money-laundering
and has maintained a good reputation in
this respect. It is a leading member of
the CFATF (Caribbean Financial Action Task
Force), and has signed Mutual Legal Assistance
Treaties with the US and UK.
The Cayman
Islands' currency is the Cayman dollar at
a rate of USD1 = KYD0.81.
The economy
experienced a period of difficulty in 2001,
aggravated by the 9/11 terrorist attacks
in the US, which cut heavily into tourist
arrivals and affected international banking.
The government responded with temporary
cuts in some import tariffs and stamp duty.
However, GDP remains one of the highest
in the world at more than USD45,000 per
head.
For 2009, the Economic Statistics Office
reported a contraction of 6.6% of GDP. A
further decline of 3.1% was expected in
2010 with a recovery to growth of 2.2% forecast
for 2011. A report for the first quarter
of 2011 put the annualised GDP for 2011
at 1.2%.
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Cayman Islands Stock Exchange
The Cayman Islands Stock Exchange (CSX)
is a private limited company owned by the
government but operated as an independent
entity under the Stock Exchange Law 1996.
The CSX, which commenced operations in July
1997, was originally set up to provide a
listing facility for the specialist products
of the Cayman Islands, namely offshore mutual
funds and specialist debt securities (known
as SPVs = Special Purpose Vehicles). See
Offshore Business
Sectors.
By
mid-2007, the CSX had more than 1,400 listings
and a market capitalisation of more than
KYD123 billion.
The
CSX is regulated by the Cayman Islands Stock
Exchange Authority and is not bound by European
Union Listing Directives or US SEC regulations.
Members must be local entities, either Listing
Agents or Brokers, who have met the licensing
requirements and have adequate staff. The
CSX has approved a number of Listing Agents
who are Cayman Islands based lawyers, accountants
or other financial-based service providers.
All issuers, other than issuers of international
debt securities and securities which are
subject of a secondary listing, must appoint
a Listing Agent in connection with their
application for listing. The Listing Agent
will provide a formal link between the Issuer
and the Exchange and will be responsible
for advising the Issuer on all aspects of
the listing process. To obtain a listing
on the CSX the Issuer of a Security is required
to pay a fee, both at the point of application
and annually to maintain the listing.
In conjunction
with Bloomberg, the CSX has developed a
fully electronic listing and trading platform
and a dedicated news wire service. The trading
facility is "order driven", displaying
a buy and sell price throughout the trading
day. Investors trade with orders being displayed
on-screen through the central system and
the trades are executed automatically when
buyers and sellers are matched.
In July 1999,
the CSX was granted approved organization
status by the London Stock Exchange. The
CSX was able to demonstrate that its regime
for listed securities meets all the detailed
criteria for inclusion on the list of approved
organizations. This was the first time an
offshore stock exchange had been added to
the list. The approved organization designation
means that securities listed on the CSX
are eligible for trading in the LSE's international
equity market and for quotation on the SEAQ
(Stock Exchange Automatic Quotation) international
trading system.
More recently,
the facility has been expanded to include
global depositary receipts and derivative
warrants. The CSX has developed rules for
these specialist products, which are designed
to raise capital from institutional investors.
Issues of depositary receipts and derivative
warrants may have to be listed to meet the
investment requirements of such investors.
Unsponsored
depositary receipts are created when a broker
or bank believes there is sufficient investor
interest in a foreign stock to make it worthwhile
to set up a deposit programme. The broker
or bank purchases the underlying shares,
deposits them in the home country and sells
depositary receipts. The foreign company
itself is not directly involved. By introducing
a listing facility for unsponsored depositary
receipts, the CSX offers an opportunity
for investors to participate in this market
to an even greater extent.
Derivative
warrants give the holder the right - but
not the obligation - to buy or sell a share,
or any other asset, at a fixed price on
or before a specified date. The CSX listing
rules deal with issues of warrants which
relate to equity securities, debt securities,
baskets of securities and indices. Derivative
warrants meet specialised investment needs
and are usually issued by a third party,
often using a Cayman Islands special purpose
vehicle.
In
September, 2003, the CSX introduced rules
that will allow the listing of shares in
foreign firms on the CSX which previously
was restricted only to the listing of domestic
stock. "This move was a direct result of
expressed requests from international companies
for listing and trading on the CSX," said
the CSX in its Autumn newsletter. "This
change now permits a company incorporated
outside the Cayman Islands (a “foreign company”)
which is (i) a foreign company registered
under Part IX of the Companies Law (2003
Revision) and (ii) an exempted or non-resident
company to apply for listing and trading
on the CSX."
With
effect from 4 March 2004, the UK's Board
of the Inland Revenue designated the Cayman
Islands Stock Exchange as a ‘recognised
stock exchange’ under section 841 of ICTA.
As a result, interest paid on securities
listed on the Cayman Islands Stock Exchange
can now be paid without deduction of UK
tax. Similarly, securities listed on the
CSX are now regarded as 'qualifying investments',
allowing them to be held directly in Personal
Equity Plans (PEPs) and Individual Savings
Accounts (ISAs).
As
the Cayman Islands felt the ongoing effects
of the financial and economic crisis, stock
exchange listings declined by over 20% in
the third quarter of 2009, with 1,316 listings,
compared with Q3 2008, and finished 2009
with a total of 1,312 listings. A contraction
of 10.6% was recorded for the first half
of 2011 with the total number of listings
at 1,136.
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Cayman Islands Entry and Residence
Citizens of the US, Canada and of Britain
and its dependent territories do not require
visas to enter Cayman; passport or birth
certificate plus photo ID is sufficient,
along with a return or ongoing travel ticket.
Other nationals require a passport plus
ticket. Visitors may remain for up to six
months.
In
January 2007, amendments revising the Cayman
Islands Immigration Law (2006 Revision)
came into force. The Law contains a number
of changes to the Immigration Law, 2003,
including work-permit term limits, permanent
residency, a new category of 'key employees'
and the ability of the Chief Immigration
Officer to grant Caymanian Status to certain
categories of applicants. The new law sought
to clarify the work permit rules after years
of frequent change to the rules, resulting
in confusion for employers and backlogs
in the processing of work permit applications.
Foreigners
without Caymanian status seeking employment
must apply for a work permit from the Immigration
Department. Not all applications are successful.
Work permits are generally valid for up
to three years, or for up to five years
in the case of domestics, teachers, doctors
and ministers of religion. Five-year permits
can also be granted to holders of certain
positions that have been approved under
a 'business staffing plan,' which the board
now requires from firms employing 15 or
more foreigners. Seven years is the maximum
length of time a work permit holder can
work continuously in the Cayman Islands,
although, in certain in exceptional circumstances,
a worker may be designated as an 'exempted
employee' in a business staffing plan. Caymanian
status is granted on a quota basis to citizens
from the UK and British Dependent Territories,
and certain other countries including the
US, Eire, Australia and New Zealand.
The
one-month temporary and six-month, short-term,
work permits have been abolished. Instead,
a temporary work permit may now be issued
for a period not exceeding six months. All
such applications will be made to, and decided
by, the Chief Immigration Officer or his
designate.
Since
such grants are not extendable or renewable
it will be important for applicants to state
clearly the length of time that the temporary
work permit will be required. In deciding
whether an application should be granted
or refused, the same criteria will be used
as for the grant of a full work permit,
except that employers will not be required
to advertise or to demonstrate that they
operate a training programme. Employers
should also note that a temporary work permit
cannot be converted into a one-year permit.
The one-year permit must be submitted and
granted prior to the expiry of the temporary
permit if the employee wishes to continue
to work.
In
January 2010, Cayman Prime Minister McKeeva
Bush announced that an amendment to the
immigration law had been drafted to encourage
foreign financial services companies to
remain in the jurisdiction.
Bush
said that the government was fast-tracking
legislation to ease immigration laws imposed
on those employed in the financial services
sector. Under the proposed legislation,
foreigners will be allowed to the island
for extended periods, and the amount of
time that they are required to reside outside
of the territory after the expiry of their
permit will be reduced.
In
a statement welcoming the decision, Cayman
Finance said that it "fully endorses
the positive steps the government is taking
to strengthen the Cayman economy and its
financial services industry in these more
challenging economic times."
On
April 28, the Cayman Islands parliament
passed the Immigration (Amendment) Bill
2010. This permits 25-year residence to
wealthy individuals who invest in businesses
that contribute to the prosperity of the
islands, on certain conditions.
The
new legislation introduces the opportunity
for foreign individuals to apply for a Residential
Certificate for Investment. While this will
cost KYD20,000 (USD24,000), it allows the
investor, their spouse and any dependents
the right to live in the islands without
the need for a work permit on certain conditions.
Under the new law, investors must:
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