Cayman already geared up to take on board new economic substance rules

George Town seen from above

The issue of economic substance is not a new one for the Cayman Islands, as the subject was much talked about some years ago and this was a motivating factor in the development of the Cayman Enterprise City project. As a result, Cayman passed its Special Economic Zones Law in 2011. Businesses located within CEC have been growing steadily in numbers since it first opened its doors to the likes of technology, media, intellectual property, shipping, aviation, commodities and derivatives trading businesses that wanted to establish a physical presence in a tax-neutral jurisdiction such as ours, while meeting globally recognised economic substance requirements.

Last year, the government passed new economic substance rules so that Cayman would comply with European Union ruling requiring Cayman-registered companies to show that they had adequate economic activity within the Cayman Islands (i.e., staff and offices) which would be a true reflection of the profits they were making.1

The question is, as far as the real estate industry is concerned, how will enacting these laws impact our industry? I believe that this latest focus by the European Union to have Cayman adopt further economic substance legislation is just taking what we have already established one step further.

The Cayman Islands has already benefitted from that original push for companies to show a commitment to more staffing. One has only to look at the population figures for the Cayman Islands to see incredible growth in people wishing to live and work here, with a population of 64,420 persons as at Spring 2018.

Quantifying the amount of ‘economic substance’

When we talk about growth in population, the real estate industry reaps the benefits of that increase. This is reflected in the huge growth in the construction and development industry in Cayman over the last year. So, the real question in my mind is just how much of an economic substance do companies registered in Cayman have to show in order to comply with these new rules. That, in turn, will impact how many people will need to move to Cayman, which will then impact our real estate industry.

Earlier this year, the Cayman Islands government published a guidance booklet to help companies comply with this new legislation, explaining just what the term adequate economic activity really means in terms of a physical presence and staffing.2 Cayman Enterprise City appears to be a sensible solution to these issues, as it touts itself as a solution for offshore intellectual property businesses, allowing them to set up a physical presence in the Cayman Islands by working within CEC’s special economic zone.

But if there is a really significant push for increasing the number of people living here, there will be a need for even more services and an increased strengthening of infrastructure, such as in transportation, communications and bandwidth services. I foresee significant numbers seeking to make Cayman their home, perhaps as many as 100,000 people living here in just a decade or so.

If the EU’s requirements mean more workers on island, then that can only be a good thing for Cayman. With Cayman Enterprise City, we have already proved we can accommodate such legislation and, in fact, it has already been done.


1 Read more on this subject in an article published in the Cayman Compass dated Dec 18, 2018.
2 Also read the article published in the Cayman Compass on Feb. 26 this year for more detailed information on this topic

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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