The
Cayman Islands Government has constructed
a regulatory regime that is highly
favourable to offshore operations,
especially since there is no taxation
in Cayman other than stamp duty and
import duties (see Direct Corporate Taxation). There
are about 80,000 companies registered
in Cayman, along with 350 banks and
700 insurance companies. See Law
of Offshore for a detailed
treatment of the legal regimes for
Banking, Insurance, Trust Management
and Mutual Funds. In this section
offshore corporate forms are summarised,
along with details of the fees payable
by the various types of financial
institution.
In
June 2000, the Cayman Islands was
identified by the FATF as non-cooperative
in the fight against global money
laundering. The result of this is
that the Cayman Islands was one of
fifteen tax jurisdictions placed on
a blacklist. Each offending tax haven
had a year in which to correct its
tax regulations and legislation. The
FATF released its next annual report
in June 2001, in which the organisation
revised its list of countries and
territories deemed non-cooperative.
Only four were removed from the list,
including the Cayman Islands (the
other three being the Bahamas, Liechtenstein
and Panama). The Cayman Islands was
praised by the FATF for its substantial
efforts to conform to forty recommendations
set out by the FATF in a code of good
practice governing money laundering.
During
2003 the Cayman government battled
to avoid inclusion in the scope of
the EU's Savings Tax Directive, but
in the end was forced to give in by
the UK Treasury, and began applying
the information exchange model under
the Directive from 1st July, 2005.
This means that information about
interest on savings paid to citizens
of European member states is being
forwarded to the tax authorities of
the member state in question.
The
Cayman Islands authorities have put
a brave face on this development,
which they tried hard to avoid.
Cayman
Islands Forms of Offshore Operation
Offshore entities may take the following
forms (click on a form for a description
of the legal regime under which it
is constituted):
Banks,
insurance companies, mutual funds,
trust management companies and other
financial institutions use an appropriate
corporate form from the above list;
in addition they are subject to registration
or licensing as described in Offshore Business
Sectors.
Cayman
Islands Fees Payable by Financial Institutions
Banks and Trust Companies (ie companies
providing trust services) are licensed
under the Banks and Trust Companies
Law 1995 as amended and pay annual fees
as follows:
Class
A License (unrestricted domestic
and offshore banking): from CI$400,000
Class
B License (offshore banking; and
trust companies): from CI$57,000
Class
B Restricted Banking License (business
dealings restricted to a list of
specified persons): from CI$37,000
Trust
Company License: from CI$57,000
Restricted
Trust Company License: from CI$6,000
Insurance
companies are licensed under the Insurance
Law 1979 as amended and pay annual fees
as follows:
Class
A License (Domestic insurance business):
CI$30,000
Class
B License (Offshore insurance and
reinsurance): CI$7,500
Class
B Restricted License (Captives):
CI$7,500
Mutual
funds and their administrators are licensed
under the Mutual Fund Law 1996 and pay
annual fees as follows:
A
licensed mutual fund administrator
pays CI$20,000 for up to 50 administered
funds and CI$25,000 thereafter;
A
restricted mutual fund administrator
pays CI$7,000;
Mutual
funds pay CI$2,500.
The
fees for listing on the Cayman Islands
Stock Exchange are as follows:
On
application for listing and annually
thereafter: CI$1,640
Umbrella
funds with more than 8 sub-funds:
CI$8,200 (there is a sliding scale
for umbrella funds with fewer than
8 sub-funds).
Secondary
listings pay a fee on application
and annually thereafter: CI$820
NB:
Fees charged by listing agents are a
separate matter; the above fees are
simply set annual dues. The charges
of a listing agent are likely to be
in the CI$5,000 neighbourhood.
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 exemptional 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.
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