The Cayman Islands — a primer

The Cayman Islands, located 500 miles south of Miami, Florida, has emerged in the last four decades as one of the world’s leading financial centers. In fact, based on assets on deposit of approximately US$1.8 trillion, the jurisdiction trails in size only London, New York, Tokyo, and Hong Kong.

Approximately 45,000 companies are registered here, as well as 9,413 mutual funds, 793 insurance companies, and a vigorous shipping registry includes 1,552 ships (250 commercial vessels and 1302 pleasure yachts). A rapidly growing stock exchange opened in July 1997. More than 40 of the world’s 50 largest banks are represented in Cayman.

The Cayman Islands, although often referred to collectively, in fact, are made up of three islands with Grand Cayman being the largest and most commercial. Grand Cayman, in physical size, is approximately 4 miles wide and 22 miles long. Of the approximately 55,000 people living the Cayman Islands, nearly 53,500 live in Grand Cayman. The other two islands, Cayman Brac (pop. 1,200) and Little Cayman (pop. 300) are located about 80 miles northeast of Grand Cayman and just five miles from each other.

The growth and importance of Grand Cayman in the international financial equation is impressive when one considers that as recently as 1965 (not much more than one generation ago), there were fewer than a half dozen telephones on the entire Island! Not too long ago, nearly all of the men of the Cayman Islands went to sea—many as turtlers and merchant seamen—and the Islanders were reknowned worldwide for their shipbuilding and sailing abilities.

Today, with more than 40,000 phone lines and one of the highest per capita penetration of internet connections in the world, the Cayman Islands have led the way among offshore jurisdictions as the venue of choice in which to conduct global business.

A number of factors have led to this spectacular growth, but nearly every assessment would include the following:

Political Stability. As a British Overseas Territory, the Cayman Islands have historically enjoyed warm relations with the United Kingdom and a stable, democratically elected local Government at home. While the quadrennial election campaigns in the Cayman Islands are often spirited, they have always been peaceful, and transitions between successive governments have always proceeded smoothly. For further information, contact the Government's website at www.gov.ky.

Government/Private Sector Partnership. A genuinely symbiotic relationship has long existed between Government and the private sector in providing wise stewardship for the financial industry. Oversight and regulation are adequate but not onerous or punitive. Genuine consultation, both formally and casually, takes place between the two sectors on a regular basis.

Economic and Social Well Being. Based on a gross domestic product of US$1.5 billion (2001 estimate) and per capita purchasing power of US$30,000, the Cayman Islands enjoy the highest standard of living in the Caribbean region and one of the highest in the world. There is little unemployment here and little serious crime.

Telecommunications and Other Utilities. Cable & Wireless, Digicel and other carriers offer reliable service to almost anywhere in the world as well as digital cellular service, and dial-up and broadband Internet connections. The Caribbean Utilities Company, or “CUC,” provides an abundance of reliable “clean” electricity to Grand Cayman, enabling “spike-free” power which, in turn, enables sophisticated computer networks to operate reliably and efficiently. An abundance of potable water is provided by The Water Authority and Cayman Water Company.

Racial and Social Harmony. Of the approximately 55,000 people who reside in the Cayman Islands, nearly half are expatriates who work amicably and comfortably alongside the native-born Caymanian population. More than one hundred nationalities are represented, providing a well-educated, well-traveled, sophisticated workforce. Nearly everyone on the island speaks English as his or her primary language.

Professional Infrastructure. In contrast to many offshore financial centers, the Cayman Islands has attracted a world-class body of service providers, sophisticated law firms and accountancy firms, including, of course, Ernst & Young, to provide expertise on the intricacies of conducting business in this leading offshore venue.