In order to continue to service international business, it will always be necessary to attract, and retain, sufficient non-Bermudian professionals from abroad.
Many of the smaller countries competing in financial services – including Cayman – have struggled over the years to find a balance on immigration policy. If it gets it right, Cayman will have a significant advantage over other IFCs, who are also struggling to find the right balance in their immigration policies.
On Nov. 5, 2014, the International Consortium of Investigative Journalists (ICIJ) published an investigatory analysis based on a confidential cache of tax agreements approved by Luxembourg tax authorities.
The world of offshore has long been under attack and with each new wave of regulatory changes the end of small international financial centers is being decried. But so far IFCs have proven extraordinarily resilient.
This year marked a turning point for international financial centers (IFCs), especially those that are British Overseas Territories (BOTs) and Crown Dependencies (CDs), in terms of the future landscape on which they will compete, cooperate and provide their services.
International financial centers like the Cayman Islands have experienced over two decades of increased international pressure in the form of new regulation and greater demand for transparency.
From a financial perspective, many consider that when money goes offshore, it enters a black hole. Bank secrecy, public corruption and the constant barrage of films and books which put the offshore in a bad light contribute to this image.
“Little else is required to carry a state to the highest degree of opulence from the lowest barbarism”, claimed Adam Smith, “than peace, easy taxes and a tolerable administration of justice.”
Since the onset of the global financial crisis of 2007-08, there has been much debate about the reforms that are needed to make the international financial system more resilient to the onset of financial crises through improvements in what has come to be known as the international financial architecture (IFA).
As is well known by now, the United States enacted a tax reform in 2010 known as the Foreign Account Tax Compliance Act, which seeks to end global tax evasion by Americans through the use of offshore bank accounts.
On 6 November, 2012, after approximately $6 billion was spent by candidates and political groups, United States voters decided to keep the status quo. Barack Obama won re-election and will serve as president for another four years.
Anti-offshore advocates regularly make the point that jurisdictions such as the Cayman Islands are to blame for the fiscal woes of their respective governments be this in the UK, USA or elsewhere. There continue to be several weaknesses in their arguments but it has also been a more than curious observation that their advocacy efforts focused more abroad than at home.
As a result of misconception, during the
first tranche of the global financial crisis, world leaders came out on
the attack against OFCs, arguing that they are inherently bad and have
to be stopped in order to protect dwindling government tax revenue.
Those who work within the industry or are familiar with the various jurisdictions know that this negative image actually bears little relation to reality.