By Jude Scott, CEO, Cayman Finance – As the unprecedented year that has been 2020 draws to a close, we can look to the year ahead with some optimism. That’s in part due to the resilience of the Cayman Islands financial services industry, which continues to meet evolving global best practices.
Our jurisdiction has been recognised by the European Union as a cooperative jurisdiction on all criteria for tax transparency and fair taxation. This should provide some comfort to investors who are increasingly engaged in a flight to quality, relocating their resources based on extensive assessments of which financial centres offer the best combination of the following qualifications: efficiency and neutrality; a global network and diverse industry; an experienced legal infrastructure and neutral tax environment; high regulatory standards and respect for appropriate privacy; world class professionals and credibility; and stability.
Very few IFCs meet these qualifications of providing benefits globally without causing harm to other countries, and none do it as well as the Cayman Islands. It provides a tax neutral hub that efficiently supports global economic growth and recovery. Through its pivotal role in international investing and financing, supported by its robust and well-regulated financial services industry, the Cayman Islands can help investors around the world as they prepare for the evolving changes in global trade and the global economy.
We do this by enabling:
- Foreign Direct Investment (essential to save or grow businesses and jobs);
- Inward infrastructure investing and financing;
- Liquidity for their economies;
- Job growth;
- Increased tax base;
- Global diversified investments for pensioners;
- Free flow of global trade, capital, investing, financing, and services.
A quick look at the numbers shows confirms that the global financial services industry considers investing in Cayman-domiciled funds to be a best practice. At the end of the third quarter of 2020, there were over 24,000 investment funds registered with the Cayman Islands Monetary Authority. In fact, 70 percent of non-US domiciled alternative investment funds managed by US Securities and Exchange Commission-registered advisors are domiciled in the Cayman Islands. A recent study performed by Capital Economics estimates that foreign investment mediated through the Cayman Islands was around USD4.5 trillion and supports in the region of five million jobs globally.
With so much instability around the world, the Cayman Islands financial services industry offers investors exceptional stability – and will continue to do so throughout 2021 and beyond.