Cayman Islands: Offshore Legal and Tax Regimes
Employment and Residence
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.
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:
- Have a net worth of at least KYD6m;
- Invest at least KYD2.4m in licensed businesses with workforces comprising of at least 50% Caymanians, that contribute towards the prosperity of the territory;
- Pass checks on business competence, show financial records of their businesses’ stability, and show they undertake a managerial role in their given area; and
- Possess a clean criminal record and be of sound health with adequate health insurance.
Bush underscored that the Residential Certificate for Investment would not incorporate a Trade and Business License and, if necessary for operations, this would need to be applied for separately.
The Immigration (Amendment) Law 2012 came into effect on June 5, 2012. This new law introduces major changes to the immigration rules on the island by creating a new category of permissions for investors who wish to live in the Cayman Islands as well as introducing new rules for business visitors.
The new Certificate of Permanent Residence for Persons of Independent Means now allows the holder to work in the Cayman Islands and eventually apply for Caymanian citizenship, without having to gain the previously required eight years of ordinary residence. To qualify for the certificate, applicants need to invest a minimum of KYD1.6m in developed real estate and be financially able to maintain himself and any dependents. The annual quota for this permit is 250.
A substantial business presence residency certificate is the second major change in the Immigration (Amendment) Law 2012. Applicants must either have a minimum 10% participation in an approved business with a substantial presence in the Caymans, or must be employed as a senior manager in a business with a substantial presence in the Caymans.