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Cayman Islands: Offshore Business Sectors

Introduction

This page was last updated on 28 June 2019.

Cayman is a well developed international financial centre. For 25 years the government has welcomed offshore business, and has created a world-standard regulatory structure to avoid money laundering and other criminal activity. The Cayman Islands has one of the world's largest offshore banking sectors, and is second only to Bermuda as a captive insurance centre. Mutual funds have been a more recent success story, assisted by the establishment of a stock exchange. Trust management has always been a significant activity. The islands also offer a shipping registry. During 2003 and 2004, China's explosive entry into world markets saw the Cayman Islands emerge as one of the primary routes for financial flows into and out of China.

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 applied the information exchange model under the Directive from 1 July 2005. This means that information about interest on savings paid to citizens of European member states is forwarded to the tax authorities of the member state in question.

In March 2010, the Cayman Islands Economics and Statistics Office released a report showing deterioration in the island’s economy in all but the banking sector in the third quarter of 2009 as a result of the ongoing global financial and economic crisis.

However bank sector assets continued to grow, albeit at a lower level than earlier in the year, at a rate of 9.5% on Q3 2008, as both net domestic and net foreign assets continued to expand.

The 2012 saw a slight decline in new company registrations. New company registrations for the year were 8,972 compared to 9,064 in 2011.

Mutual fund registrations fell during 2012 compared to a year earlier to 8,950 new registrations, compared to 9,258 in 2011.

 

 

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