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Lowtax
Network Content Update | Issue XXII | 24 January 2008 |
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Dear Colleague, This week:
I hope you find this update useful. Please remember that you can customise your mailing preferences by visiting your own profile page to choose from 29 offshore tax and law subjects in order to receive just the information you want. You can also unsubscribe completely by following the instructions at the bottom of this page. Kind regards, |
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Offshore Cayman Islands
The Cayman Islands are an English-speaking Dependent Territory of the United Kingdom, located in the Caribbean between Cuba and Central America. There are two international airports, one in George Town, Grand Cayman and the other in Cayman Brac. Aabout nine major airlines fly to Cayman and there are daily flights to Miami and weekly flights to major North American and European cities. Cayman is politically stable; under the 1972 constitution, the Governor represents the Queen and assigns portfolio responsibilities to five elected Ministers of Government, although the constitutional relationship between the Cayman Islands and the UK is undergoing change. There are no taxes in the Cayman Islands: Government revenue comes from customs duties, stamp duty and annual fees levied on corporations. The population of 46,600 is of mixed British and Jamaican stock, with more than 70 nationalities present in the work-force. The economy is highly dependent on tourism, with financial services also important. Cayman is the largest offshore banking centre in the world with 350 banks and deposits worth about US$1.7 trillion. It is the second largest captive insurance base after Bermuda, with assets worth $20 bn. The Cayman Islands trust sector is thought to manage more than $500 bn. Mutual funds are a growing sector, especially since the opening of the Cayman Islands Stock Exchange in 1997. The Cayman Islands have emerged as a predominant registration base for hedge funds; CDO and other securitization instruments have also taken a firm hold. The Caymanian dollar is fixed against the US dollar at CI$1.00 to US$1.20. There is no exchange control. Cayman is an expensive jurisdiction with an established commercial infrastructure in place and a flexible approach to regulation, within its strong desire to maintain respectability. The Cayman Islands have quite a good reputation in the Western hemisphere, but in Europe have tended to exemplify 'tax havens', largely perhaps as a media stereotype rather than as a matter of objective reality. The truth is that Cayman has tried hard with a large number of statutes to keep up with the international pressure for offshore centres to keep themselves clean, even accepting in 2001 the need to allow investigation of fiscal wrong-doing, at least when criminality is in evidence both internationally and in Cayman itself. The prevailing attitude in Cayman however is still to protect confidentiality in the absence of demonstrated criminality. Although the Cayman Islands was briefly included on the FATF list of jurisdictions with inadequate defences against money laundering, in 2001 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, including the issuance of money laundering regulations and amendments to the Monetary Authority Law and the Proceeds of Criminal Conduct Law. Amendments have also been made to the Banks and Trust Companies Law and the Companies Management Law; and compulsory licensing for financial firms was introduced in late 2002. It remains to be seen what impact will
be felt in the Cayman Islands from the Savings Tax Directive after
it went 'live' in July, 2005. |
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Offshore
Dubai Is A Regional Entrepot
. . . Jebel Ali, home of a huge man-made port, has the largest free-trade zone in Arabia, housing an ever growing list of international corporations which use the zone for both manufacturing and as a redistribution point. Dubai international airport is second only to Tokyo in the number of daily transit passengers it handles and second only to Seattle as a sea-air hub. In November 2005, in anticipation of a huge increase in the numbers of tourists, business travellers and rising trading volumes, the Dubai authorities announced the launch of a project to build the world's largest airport in the Jebel Ali Free Zone. The airport, originally known as the Jebel Ali International Airport (JXB), but since renamed the Al-Maktoum International Airport in honour of Dubai's ruling Al-Maktoum dynasty, will be a massive undertaking, with total infrastructure costs expected to stretch to an estimated USD33 billion. When completed, it will have at six parallel runways, as many concourses, and will be capable of handling more than 120 million passengers and more than 12 million tonnes of cargo per year. To be completed in phases, the first of the six runways was officially completed in November 2007. Dubai's harbor is the most important port in the Middle East and is ranked among the world's top 10 in terms of container throughput. The emirate is strategically located between Africa and the Middle East and between the Far East and Europe making it a gateway to over 1.5 billion consumers located in countries surrounding the Red Sea and the Gulf. Dubai's state-of-the-art air cargo village helps ensure the worlds fastest sea-air transport in as little as 4 hours. Transportation is facilitated by low-cost warehousing and storage facilities including purpose built cold stores. Dubai is served by more than 170 shipping lines and the airport by around 120 airlines. . . . And Is Successfully Diversifying Away From Oil Petroleum has traditionally dominated the economy of the UAE. At one time an underdeveloped area, by 1985 the region had the highest per capita income in the world. This immense wealth has been invested in capital improvements and social services in all seven of the emirates. Petroleum production is centred in Abu Dhabi and Dubai. Industrial development is essentially petroleum related but is limited by a lack of trained personnel and raw materials. Helped along by the Jebel Ali Free Trade Zone, which is calls itself home to 5,500 companies from over 120 countries, the emirate's non-oil imports expanded by 200% between 1986 and 1994. In 2004, total non-oil imports stood at Dh 149,046 million.There are no foreign exchange controls, quotas or trade barriers. Import duties are extremely low, and many products are exempt. The UAE dirham is freely convertible and is linked to the US dollar. During 2002, Dubai began to develop plans for the Dubai International Financial Centre (DIFC), intended to be a major financial entrepot; a proposed regulatory structure for the DIFC was published in June, 2003. In July of that year, the Federal Cabinet of the (UAE) approved a Federal Decree allowing the DIFC a large degree of sovereignty. The DIFC was launched in 2003 and began operations in late 2004, and it is hoped that the Centre will double - to 20% - the financial sector's contribution to the GDP of the United Arab Emirates by 2010. There are no taxes to speak of Apart from the oil industry and domestic banking, there are no income or capital taxes in Dubai, and no withholding tax. Dubai has a number of double tax treaties with high-tax countries and is often used in international tax planning by major corporations. Dubai belongs to the unified customs area of the Gulf Co-operation Council which came into effect on 1st January 2003 and covers Kuwait, Qatar, Oman, Saudi Arabia, Bahrain, and the United Arab Emirates (including Dubai). Learn more in our full Dubai Knowledgebase. |
