Hawk-i - 03 October 2016

Creative Cayman - thinking beyond borders

Island economies can be more fragile than those of larger countries, with one or two industries often creating the majority of wealth.

Over time those key industries mature and islanders constantly try and diversify their economies. But it takes foresight and effort to reinvent oneself; finding new niches in today’s complex world is not easy.

The Cayman Islands were once an uninhabited layover for ships to resupply with turtles as food for the voyage ahead. From that humble beginning, a small settlement began a hard life of sea related trades.

The 1960s brought tourism and shortly after, banking and finance, and Cayman launched into the 21st century with a tourism industry and a financial engine that makes its per capita GDP the envy of far bigger economies.

But nothing stands still. The foundations that Cayman’s finance industry was built on – tax, hedge and banking – have evolved significantly from the early days. So the canny Caymanians have cleverly diversified their economy.

Enter Cayman Enterprise City, Cayman’s first Special Economic Zone (SEZ) aimed at attracting diverse international investment. The SEZ has an alternative licensing regime, with incentives for entities that want a physical presence in the Islands from which to conduct international business.

The following types of businesses are specifically authorised to operate from the SEZ:

  • Internet and Technology
  • Media, Marketing and Film
  • Biotechnology, Life Sciences, environmental and green technology
  • Commodities, Derivatives and investment management
  • The Maritime Industry

A broad swathe of economic activity is encompassed within the SEZ mandate and while those activities could have been conducted in Cayman before the SEZ, now a single fee allows companies to avoid the myriad fees, duties and administrative complexities they would otherwise have faced.

SEZ benefits include:

  • Exemption from elements of the Immigration Law, the Business Licensing Law, the Customs Law and other legislation
  • Fast-track, long term work permits and residence visas, granted in 5 days
  • Zero import duty
  • Zero income, corporate, sales, or capital taxes
  • Exemption from most government fees and duties
  • Fast-track set-up of operations
  • Minimal government regulation
  • 100% foreign ownership permitted

Prior to the advent of the SEZ, few industries in the designated categories existed in the Cayman Islands so, rather than breaking apart existing business, the SEZ is developing a whole new sphere of economic activity that Cayman would never otherwise have seen.

Companies are using the SEZ to provide a robust and competitive physical presence in a tax neutral jurisdiction, and making the most of the fiscal benefits this brings.

Hawksford established its presence in Cayman, and the Americas, in 2015. With an established footprint in the UK, Middle East and Asia, Hawksford was looking for a jurisdiction with the reputation, credibility, products and appeal to complement the demands of our global client base. The jurisdiction’s commitment to innovative projects, like the SEZ, is a significant attraction to like-minded entrepreneurial businesses such as Hawksford.

I look forward to seeing the future visionaries of companies akin to the likes of Facebook, Amazon, Netflix and Google, planting their corporate feet firmly in the golden sand of the Cayman Islands’ SEZ.

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