Richard Coles, of Cayman Finance, shows how the Cayman Islands are staying on top as a financial centre

1. I
f ever one reads an attack on the
Cayman Islands it can usually be
guaranteed to come from one of
three sources:
1) Hollywood. Thank you Tom
Cruise, do not come back any
time soon.
2) Much larger countries whose
economy comes under the head-
ing of ‘basket case’. Yes, USA
and UK, I’m thinking of you.
3) Ultra Left bloggers who want to
see a uniform (and very high)
rate of tax levied throughout the
world.
We in the Cayman Islands financial
community have learned to live with
these barbs, and are content
to stand by our track record
of fiscal probity and efficien-
cy. Our current regulations
recognise that Cayman ve-
hicles trading in onshore ju-
risdictions are subject to the
laws and regulation of those
jurisdictions. Indeed, the
Cayman Islands government
announced in September
that we are now in compli-
ance with all nine essential elements
of international tax transparency and
information standards as set by the
OECD’s Global Forum.
Top financial centre
None of this comes as any surprise
to those of us who work in Cayman.
Indeed, last year the leading finan-
cial magazine The Banker named the
Cayman Islands as the top specialised
financial centre for the second year
running. By an increased margin, this
placed us above jurisdictions such as
Bermuda, Jersey, Guernsey, Malta, Gi-
braltar, Monaco and Cyprus.
Another jurisdiction, Ireland, also
tried to claim that there was an exo-
dus of hedge funds from Cayman to
the Emerald Isle. They were quickly
disabused of this canard when it was
pointed out that the Cayman fund
industry was growing to the tune of
95 new funds per month. According
to The Cayman Islands Monetary Au-
thority (CIMA), the total number of
regulated funds stands at 9,409. This
June 2011 figure comprises 8,857 reg-
istered funds, 424 administered funds
and 128 licensed funds.
One commentator noted: “For the
institutional investors and managers,
the well understood path of the Cay-
man fund – non bureaucratic, quick
set-up times, high-quality service
providers and its solid reputation - is
preferred.”
It has also not escaped the notice
of canny global investors that Cay-
man is well placed in terms of the EU
AIFM Directive and is compliant in the
relevant issues.
Add all of this to the hated 50% tax
rate in the UK and Capital Gains Tax
at 28% and it is hardly any surprise
that more and more UK business peo-
ple are looking to the Cayman Islands
with a view to incorporating here.
It’s not all about hedge funds on
Cayman. Company registration fig-
ures jumped by 1.15% in the first six
months of 2011 from 91,206 to 92,251.
As of June 2011, 16 Class A banks and
231 Class B banks were licensed by
CIMA. Class A insurers stand at 29
and of captive insurers there is a total
of 725.
Staying on top
Is everything in the garden rosy? Of
course not. We in the finan-
cial community must tackle
a few niggling problems.
We need to provide 25-
year security of tenure for
financial professionals wish-
ing to establish operations
in Cayman. The signs are
good on this front, thanks to
the vision of Premier McK-
eeva Bush.
We must continue to
combat misinformation generated by
high-tax advocates concerning tax
evasion and money laundering.
We must resist European bureau-
crats who are pushing for us to adopt
direct taxation. I don’t think we need
lectures from them how to run an
economy.
Lastly, we ensure that our regula-
tions continue to interface with the
onshore entities with whom we deal
with on a daily basis.
Incidentally, the weather’s great,
the beaches are world class and
we speak English. What more do
you want?
WWW.AFMMAGAzINE.COM 0 60 60 9
View from the topRichard Coles, of Cayman Finance, shows
how the Cayman Islands are staying on top
as a financial centre
RichaRd coles
chairman,
Cayman Finance
“wearenowincompliancewith
allnineessentialelementsof
internationaltaxtransparency
andinformationstandards”
- Richard Coles
Featurereportcaribbean report
cayman islands
cayman
009_ASIACarib11_CaymanFinance.indd 6 12/10/2011 10:45