The Cayman Islands continues to maintain its dominant position as a leading global financial hub, efficiently connecting law-abiding users with providers of investment capital and financing worldwide, benefitting both developed and developing countries.
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Despite the global pandemic, the Cayman Islands continues to maintain its dominant position as a leading global financial hub, efficiently connecting law-abiding users with providers of investment capital and financing worldwide, benefitting both developed and developing countries. Cayman’s commitment to excellence and modern legislation are a few key elements of its performance, particularly in capital markets and investments. Alongside this, Cayman is strengthened by close connections to the United Kingdom. Cayman has also remained the leading jurisdiction for international hedge funds, as around 85% of the world’s hedge funds are currently located here. Cayman is the number one domicile for healthcare and group captives, and continues to excel globally in banking, capital markets, trusts and fiduciary services.
For eight months during 2020 Cayman was added to the European Unions’ list of non-cooperative tax jurisdictions due to the Islands “not having appropriate measures in place relating to economic substance in the area of collective investment vehicles.” In September 2020 Cayman was removed from the EU list after it adopted new reforms to its framework on Collective Investment Funds. As the Cayman Islands’ Governor, Martyn Roper OBE, said “Despite dealing with the global pandemic, Cayman has yet again shown a strong track record in fully adhering to international standards. This supports the sector’s strong international reputation as a world leading, highly professional and high quality financial services sector.”
Since 2018 the Cayman Islands has passed almost 20 pieces of legislation to meet EU demands on tax matters. This includes amendments to the Mutual Funds Law and a new Private Funds Law to implement new rules for the registration, administration and supervision of funds.
As a global financial centre, banking in the Cayman Islands is a major part of Cayman’s financial sector. Regulated by the Cayman Islands Monetary Authority (CIMA), banking in the Cayman Islands is a major part of Cayman’s financial sector, with 123 banks licensed as of the end of September 2020.
According to the Cayman Islands Judicial Administration there are are just over 900 licensed attorneys as of December 2020 in just over 35 law firms. Many of these firms have a strong global presence and are internationally renowned. Quite a number of local firms have several offices operating around the world – from London to Hong Kong making the Cayman Islands as one of the premier jurisdictions for legal services.Read More
The Cayman Islands is a well regulated business environment, so it is not surprising that some of the top international accounting firms have offices here. Most of these international branches operate as full service firms.
The prominence of hedge funds (or ‘mutual funds’ as defined in the Mutual Funds Law) in the Cayman Islands and the growing investment interest in them by institutional and sophisticated and/or high net worth investors has steadily increased in recent years.
As perhaps one of the most publicly recognised applications of FinTech, cryptocurrencies are virtual currencies that use cryptography to secure and verify transactions, and to control the creation of additional units. But Fintech – a shortened form of ‘financial technology’ is broader than just cryptocurrencies.
A growing sector of the Cayman Islands financial services industry is the provision of independent directors. During the recent financial crisis, it became apparent that independent directors from the Cayman Islands were indispensable when hedge funds were faced with making difficult decisions.Read More
Insurance LegislationThe enactment of the Insurance Law (2010) (the ‘Insurance Law’) was a result of public and private sector collaboration in an effort to improve the regulation of insurance business in the Cayman Islands, enhance protection for domestic consumers and open new frontiers of business development.
The main provisions of the Insurance Law include what were at the time two new categories of insurer licences – Class C (Special Purpose Vehicles) and Class D (Reinsurers). It also includes whistle‐blowing provisions, enhanced domestic policy holder protections and provides for increased penalties and regulatory powers by the Cayman Islands Monetary Authority, regulator of Cayman’s financial services sectors.
In March 2013, Cayman introduced incorporated cell legislation for segregated portfolio insurers. The Insurance (Amendment) Law (2013) confers several advantages, such as allowing a portfolio insurance company (“PIC”) the flexibility to transition to a stand‐alone captive unlike an unincorporated cell. The Insurance (Portfolio Insurance Companies) Regulations, 2015 were brought into force on 16 January 2015, along with the related section of The Insurance (Amendment) Law, 2013. These regulations enhance the insurance statutory framework, providing more alternatives to risk management by enabling insurers incorporated as Segregated Portfolio Companies (“SPCs”) more flexibility.
The Cayman Islands remain one of the leading jurisdictions for captive insurance in the world, with 125 group captives totaling over US$3.5 billion in premiums and just over US$10 billion in assets as of December 2020.Read More
Although the reinsurance industry is relatively small in the Cayman Islands when compared to Bermuda, it has shown evidence of continued growth over the last few years, and remains an area for further growth in 2019.Read More
As a global centre of excellence for trusts, the Cayman Islands financial sector has serviced international clients for decades with what is the most flexible instrument for wealth structuring and estate planning.Read More
Several of Cayman’s law firms specialise in capital markets and structured finance transactions for international clients.
The Cayman Islands is continuing to be the domicile of choice for US CLO managers. CLOs securitise assets, typically leveraged loans, by pooling them together and paying out income and principal repayments from the pool to note holders.Read More