Cayman – a solid force in a sea of change

These past few years have seen massive upheavals in the economies of many countries around the world, big and small, yet Cayman remains strong as a resilient jurisdiction that continues to offer a professionally skilled workforce second to none, opportunities for growth, innovation in development and a lifestyle that is still envied the world over. Holding on to these attributes is a challenge that I believe Cayman is more than up to meeting. 

Patent and Trade Mark Law promises economic diversity

Economic diversity has been touted as vital for small offshore jurisdictions such as the Cayman Islands in order to continue to thrive and prosper in times of economic crisis.

The good news is that Cayman recently received a sizable boost when it comes to expanding its three existing economic pillars – financial services, tourism and real estate – with the recently enacted Patent and Trade Mark Law. This new law, among other requirements, introduces the need for local firms to be hired for the processing of applications, as well as introducing new residency requirements for patent and trade mark agents.

Any move towards encouraging inward investment to these islands must be seen as positive in the eyes of the real estate industry and the jurisdiction as a whole, especially one which is based upon such innovative legislation that will hopefully not only create another niche market for Cayman’s highly skilled work force, so that they can lead the industry as they do in the hedge fund market, but also which will encourage new professionals to the islands.

The knock-on effect of expanding the population via the new residency requirements brings benefits to everyone, as the trickle-down effect of an expanding population is felt not only in government’s coffers with new work permit, duty and other fees, but also in the private sector as well, as these new workers purchase property, cars, send their children to private schools and generally use local goods and services.

Now that the legislative framework has been passed, it is proposed that the newly launched Cayman Enterprise City that operates within Cayman’s Special Economic Zone will also house considerable intellectual property within its business parks, namely Cayman Internet & Technology Park, Cayman Media Park, Cayman Biotechnology Park, Cayman Commodities & Derivatives Park, Cayman Outsource Park and Cayman International Academic Park.  Once off the ground, this will help to create new opportunities in the Cayman Islands.

A question of tax

When newcomers come to the Cayman Islands and begin looking to purchase property, they will no doubt be pleased to find out that the Cayman Islands government does not charge an annual property tax as in the case of North America.

Instead, new land or home owners are required to pay a one-time stamp duty payment upon completion of their purchase. Stamp duty rates generally vary from between 6 and 7.5 per cent of the purchase price for non-Caymanians, depending on the location of the property or land.

Making this payment up front should be viewed in the context of how much it costs the purchaser over the time frame for which the property is owned, which, if capitalised over a good few years, will be a much less expensive alternative to an annual property tax. In addition, in North America the US government take a five yearly assessment of the value of the property at which point the cost of the property tax generally increases.

As an example, this often leads to the situation whereby elderly home owners are effectively discriminated against, having purchased their property many years ago only to see the value increase dramatically over time along with the corresponding property tax, making the annual property tax expense unserviceable on a senior citizen’s pension. This situation has forced many seniors to have to sell their family homes.

While I am no tax expert, I would suggest that a one-time stamp duty hit is highly preferable to the unknown variable of continually rising taxes. In addition, Cayman home or land owners have no inheritance or capital gains tax to worry about, thereby passing the property to dependents or on-selling to make a profit comes with no penalties to the owner or his estate, a huge benefit over our North American cousins.

Changing the above-mentioned format for the taxing of property ownership in the Cayman Islands would not be a prudent move, in my mind, and the negative repercussions of such a move would lose Cayman an important competitive advantage that it currently enjoys.

As the North American economy recovers and investors increasingly return to purchase property here in Cayman, seeking a safe haven for their investments and a wonderful place in the sun for themselves and their families, Cayman’s real estate industry is poised for steady growth, particularly with the new construction offering of exceptional luxury condominiums on Seven Mile Beach, namely the WaterColours and Sea Breeze properties.

Emerging versus established markets – all about risk

Lessons learned from the global economic crisis have directed investors into moving away from traditional markets and investigating new markets in which they may increase their earnings. China and India have long been touted as potential global power houses. Closer to home we may view Jamaica or Honduras or even the Turks & Caicos islands as emerging markets that may tempt investors in the property markets away from the traditional stronghold of the Cayman Islands.

These destinations may offer highly attractive terms for purchase, including a fraction on the dollar as compared to similar properties in the Cayman Islands, but with such attractive prices comes a much greater element of risk. The question for a prospective investor is just how much risk can be born when compared to the reward achievable.

The Turk & Caicos Islands is a good example of an emerging market that unfortunately succumbed to government corruption. It touts itself as “the next Cayman Islands” yet it lacks the infrastructure to support any kind of burgeoning real estate market and led to the subsequent take-over of its government by the British government. Because it is an emerging market, there are more developments and increasing internal competition. The fast pace of development in Turks & Caicos was a contributing factor to the corruption which became evident, thereby destabilising the government, increasing crime rates and generally making it difficult for developers to do business, making it unattractive for foreign investment. 

The world has changed considerably since the days when the Cayman Islands were first in their own stages of development, back in the 1960s and 1970s and risk versus reward have to be carefully considered when emerging markets present themselves as attractive opportunities.

In addition, Cayman enjoys a strong local market which therefore acts as a buffer when the global market, and in particular the US market, goes into decline. Because of the strength of Cayman’s local market, negative effects that may be felt in emerging markets at such times, for example a significant rise in crime and corruption, are not evident here. That is the danger of a reliance on outside investment for growth.

For all the pressures placed upon the Cayman Islands, whether they are threats of taxation by onshore jurisdictions extending down to the Islands, threats of the imposition of domestic taxes, or the prospect of emerging markets painting a more attractive picture, I believe the Cayman Islands will not only stand the test of time but continue to thrive and prosper, so long as we continue to offer innovation, flexibility, professionalism and a highly skilled work force.

It is these attributes that will continue to attract investors and new professionals alike to our shores, that and a first class product offering set among a stunning location.


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James Bovell
James has been a part of the real estate industry in the Cayman Islands since 1991. Born in the Caribbean and educated in the UK, he has achieved great success in listing and selling many of Cayman’s choice homes, waterfront condominiums and developments, land parcels and investment opportunities.  James has received many of RE/MAX International’s awards including The Circle of Legends, (the highest career achievement within the RE/MAX international network with fewer than 200 inductees to date).
James Bovell
Broker/OwnerRE/ MAX Cayman Islands
PO Box 30189 Grand Cayman
KY1-1201 Cayman Islands
T: +1 (345) 945 4000 E: [email protected] W: 


RE/MAX, which stands for 'real estate maximums', was founded in the 1970's by Dave & Gail Liniger in the United States of America. They developed a unique franchise system that allows real estate agents to maximise their potential by having the security of a franchise and at the same time having the individual freedom to run their own business. Today the RE/MAX network comprises over 6,000 offices with around 90,000 associates in 85 countries.

RE/MAX Cayman Islands is such an independently owned and operated office within the real estate network of RE/MAX International and RE/MAX Caribbean/Central America. The office at 7 Mile Shops on West Bay Road unites 21 real estate professionals and 9 administrative staff under one roof. All our associates and administrative staff are highly experienced and constantly expand their knowledge with ongoing training. Within the office, our associates use the synergy potential. Not only synergies within the office are important but we also work closely with RE/MAX offices all over the world as part of our international referral system.

Locally and internationally we are dedicated to maintain a high degree of visibility which will benefit our highly valued customers and clients as well as our Sales Associates. A comprehensive marketing strategy across all media including print and internet ensure our consistent exposure.

We are well established in the Cayman Islands real estate market as a strong office, capable of producing outstanding results. Referrals from satisfied buyers and sellers are a proof of it as well as the many awards the office has received. 

Physical address:
Seven Mile Shops
215B West Bay Road
Grand Cayman

Mailing address:
PO Box 30189
Grand Cayman KY1-1201
Cayman Islands