Caymans Urged To Raise Game

By Editorial 14 May, 2010

Speaking at a recent conference, Cayman Finance Chairman, Anthony Travers called for the further relaxation of the jurisdiction's "highly restrictive immigration and rollover policies" to encourage professionals to the territory and to maximise its offering as a leading international financial center in light of recent fee hikes.

Recalling the introduction of higher fees, including for work permits, in the October 2009 budget, Travers observed that the regime is unsustainable, and would lead to more competitive jurisdictions taking business from the islands. He suggested, as the government is increasingly seeking greater revenues from fewer transactions, the island’s offering should be of a higher standard. In particular, Travers called on the government to introduce additional reforms to allow prospective investors the opportunity to establish physical operations in the island to allow them to further maximise the benefits of investing in the Caymans, with its low tax regime.

As a first step, Travers called for the government to amend the rollover regime, which requires foreign workers to leave the island every seven years for a period of one year, before reapplying for a work permit. The rollover policy was first introduced to prevent expatriate workers from remaining the Cayman Islands indefinitely, as expatriate workers residency could be secured if they remained in the territory for 10 years concurrently.

Travers said it was unreasonable to expect businesses to establish operations, and for expatriate workers to take up employment in the Cayman Islands under the current rules. “It is unrealistic to suppose that the highest quality financial professionals could be persuaded to relocate to the Cayman Islands on [this] basis,” Mr Travers told the conference. He said the government would need to strike a balance between protecting local professionals’ interests and enhancing the islands’ offerings for prospective investors.

The Cayman Islands Premier, McKeeva Bush previously put his weight behind the proposals in January 2010. He said that the island would consider reducing the term for which an expatriate worker would be required to leave the islands to between three and six months.

Travers said that prior to the introduction of the rollover system, businesses ran administrative and management functions in the island. Mitigating the effect of the rollover system, Travers explained, could help secure new business from foreign companies establishing fund management, broker-dealer activities, investment and merchant banking, and reinsurance operations, which could lead to the expansion of the fund administration industry, thus bolstering revenues for the government and local employment.

Concluding, Travers stated that whilst the Cayman Islands has been deemed a territory that is in compliance with international standards on transparency and tax information, new scrutiny surrounding the lack of physical operations in the territory could be the next hurdle for the islands. By encouraging foreign companies to establish operations in the islands, Travers told participants, the jurisdiction could further demonstrate its compliance with the changing requirements being placed on offshore territories.

Tags: Expatriates | Tax | Investment | Business | Law | Cayman Islands | Fees | Offshore | Professionals | Standards |


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