Continued investor interest, robust economic
development, enhanced legislation and increased international cooperation were
highlights of the Cayman Islands financial services industry during the first
half of 2011.
The Cayman Islands government, in collaboration
with industry partners, has taken a number of steps to boost the jurisdiction’s
business-friendly climate to allow for further growth and stability. A
significant legislative update –the Companies Law (Amendment) Bill, 2011 –
which was passed in April this year, aims to increase Cayman’s competitiveness
in financial markets. This Bill makes necessary provisions to enhance the
jurisdiction’s offerings in the areas of company registrations and securities
A joint effort
between Ministry of Finance officials and the Financial Services Legislative
Committee, which is comprised mainly of private-sector members, enabled
efficient progress in the Bill’s solicitation and drafting processes for a
relatively quick turn around time. Provisions of the Bill include:
- amendment of merger provisions;
- treasury shares;
- paperless share transfer;
- share redemption and repurchases;
- execution of documents;
- update of foreign company provisions;
- special resolutions: permit different thresholds for different matters;
- permitting company names in a foreign script; and
- Segregated Portfolio Companies – portfolio names, director’s liability,
segregation of assets and termination of SPCs.
These amendments address
client and market-driven issues that have arisen in practice, and are expected
to increase the attractiveness of the Cayman Islands as a domicile for
corporate entities, thus maintaining our competitive edge.
Amendments have also
been made to the Mutual Funds Law, creating an additional licensing category
for mutual fund administrators. This will allow Cayman to maintain our leading
position as a funds domicile and to continue growth in the fund administration
on international cooperation matters
The Cayman Islands
International Tax Cooperation Team reported significant progress in
implementing recommendations contained in the OECD Global Forum’s Phase 1 Peer
Review Report, during the Global Forum meeting held in May in Bermuda. Cayman’s
update included legislative amendments to the companies, partnerships and
trusts laws, to require the retention of relevant accounting records, including
underlying documentation, for a minimum period of five years. The team also
noted the enhanced sanctions for non-compliance, in line with the international
As such, in
accordance with the Revised Methodology for Peer Reviews and Non-member
Reviews, the Cayman Islands has requested a supplementary report seeking an
upgrade of the determination in the Phase 1 Peer Review Report of the essential
element relating to accounting records. It is expected that this supplementary
report will be examined by the Peer Review Group at the earliest opportunity.
The jurisdiction is also expected to undergo its Phase 2 evaluation later this
Additionally at the
Global Forum, Premier McKeeva Bush concluded negotiations for a Tax Information
Exchange Agreement with China; the document now awaits final signatures. Cayman
has signed 24 TIEAs, the most recent being with Japan, India and South Africa
this year. Fourteen others are at various stages of negotiation.
Keeping in line with
our commitment to support the OECD in matters relating to the exchange of
information for tax purposes, the Cayman Islands will host the 7th Meeting of
the Global Forum Peer Review Group from 18-22 July. More than 150 delegates
from 40 countries are expected to attend this high-level meeting, which will be
held at the Westin Casuarina Resort.
As cooperation between
Cayman and our international counterparts continues to grow, so also has
Cayman’s economic development locally. There are several large capital projects
in the works; two major developments expected to commence later this year are
the Cayman Enterprise City and the Narayana Cayman University Medical Centre.
Government has committed to supporting these projects, which are expected to.
On the business
development front, the Department of Commerce and Investment continues to
partner with the private sector to build synergies for efficient facilitation
of investment projects. DCI’s representatives in Dubai and Hong Kong continue
to be integral to the gathering of source market data and the lead generation
process. As an economic development agency, DCI works to stimulate and
facilitate appropriate, long-term inward investment in the Cayman Islands.
DCI’s new director,
Jonathan Piercy, will lead the department’s efforts to attain economic
diversification and further growth. In addition to ongoing work to improve the
business licensing process and law, as well as the provision of technical
assistance to local entrepreneurs and small business, he has stated that one of
his major priorities will be to assist policymakers in creating a framework for
a comprehensive economic strategy for our Islands.
London Office is expected to have a new staff position by July, thus enhancing
its business development and international outreach capabilities.
As we progress through
2011, government will continue to work closely with private sector partners,
both locally and internationally, to maintain Cayman’s presence in the global
financial services industry. A business development trip to Brazil is scheduled
for September 2011, for which government officials from the Ministry of Finance
and partnering agencies will jointly promote the jurisdiction across leading
sectors such as investments and securities, insurance and trusts.