Guidance

Overseas business risk: Cayman Islands

Updated 21 August 2017

We aim to provide information on this page on the key security and political risks which UK businesses may face when operating in the Cayman Islands.

1. Political and economic review

1.1 Political

The Cayman Islands, comprising of three islands – Grand Cayman, Cayman Brac and Little Cayman, are situated some 260 km north-west of Jamaica in the Caribbean Sea. The Islands have an area of about 260 sq km. ‘Cayman’ comes from a Carib word for marine crocodiles, once found on their shores. The vast majority of the population lives on the largest of the 3 islands, Grand Cayman. English is the principal language. The present constitution came into force on 6 November 2009 and provides a ministerial system of government.

The Governor retains responsibility for aspects of the public service, defence, external affairs and internal security including the police.

The Legislative Assembly comprises the Speaker, eighteen elected members and 2 ex-officio members (the Deputy Governor and the Attorney General). Elections are held every four years. The Constitution also provides for a Cabinet consisting of the Premier, 6 other Ministers and the 2 ex-officio members of the Legislative Assembly. The Governor presides at meeting of Cabinet. Cabinet has responsibility for the formulation of policy, except in the areas reserved to the Governor.

1.2 Judicial

As a UK Overseas Territory, the Cayman Islands’ judicial system is based on English common law. Locally enacted statutes are passed by the Legislative Assembly and agreed to by the Governor, who is the appointed representative of His Majesty the King. Respect for the rule of law – and due processes that balance transparency with the protection of the legitimate interests of clients and investors – are the cornerstones of Cayman’s continuing success.

1.3 Economic

Financial services and tourism are the key pillars in the Cayman Islands’ economy, with the country recording a fifth consecutive year of real GDP expansion in 2015. As of December that year, there were 184 licensed banks and 24 nominee trust companies; 739 insurance companies; 10,940 mutual funds; and 98,838 registered companies. Also in 2015, Cayman hosted 385,378 land-based overnight visitors, an annual increase of 0.7%; and 1,716,812 cruise ship visitors, an increase of 6.7%.

Government’s principal revenue sources are import and stamp duties; and company, bank and trust licence, and work permit fees. Cayman does not levy income, payroll, company, corporation, inheritance, capital gains, or gifts taxes; or VAT. Although imports outstrip exports by about 100:1, the visible trade gap is more than offset by invisible earnings (foreign currency earned through financial services and tourism, rather than in selling goods).

In 2017, major infrastructure projects undertaken by Government and private sector include the port re-development and an international airport terminal upgrade; hotel construction and re-development along the Seven Mile Beach corridor; and large-scale road works for West Bay Road, Easterly Tibbetts Highway, and Linford Pierson Highway.

2. Business and human rights

Several major human rights conventions have been extended to the Cayman Islands by the United Kingdom, including:

  • European Convention on Human Rights (ECHR)
  • International Covenant on Economic and Social Rights (ICESCR)
  • International Covenant on Civil and Political Rights (ICCPR)
  • UN Convention against Torture (UNCAT)
  • UN Convention on the Rights of the Child (UNCRC)
  • UN Convention on the Elimination of Racial Discrimination (CERD)

In 2012, the Gender Equality Law 2011 took effect and a 5-person gender Equality Tribunal was established to hear and determine discrimination complaints. Work is now underway to extend the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) to the Cayman Islands.

In 2014 the Cabinet approved the Cayman Islands Disability Policy 2014 to 2033. The vision of the Policy is to ensure people with disabilities are able to live with dignity, are respected, and have the opportunity to participate fully in society.’ In 2016, the Disabilities (Solomon Webster) Law came into effect to support the policy. The National Council for Persons with Disabilities was created in 2017 as a watchdog entity monitoring implementation of the policy and the Law.

There is no provision for marriage or civil partnership ceremonies between same sex couples and same sex partnerships, legally binding or otherwise, are not recognised in Cayman law. Hotels and resorts are generally welcoming, regardless of sexual orientation. Local attitudes can be conservative and some do not approve of public displays of affection between same sex couples.

In 2016, the Cabinet approved the Cayman Islands Older Persons Policy 2016-2035. The vision of the policy is ‘Advancing the Well-being of Older Persons’. In 2017, the Older Persons Law came into effect to support the policy. The Council of Older Persons is expected to be created by September 2017 as a watchdog entity (among other matters) monitoring implementation of the policy and the Law.

3. Bribery and Corruption

Bribery is illegal. It is an offence for British nationals, or someone who is ordinarily resident in the UK; a body incorporated in the UK; or a Scottish partnership to bribe, anywhere in the world. Furthermore, a commercial organisation operating a business in the UK can be liable for the conduct of a person who is neither a UK national nor resident in the UK, or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

The Cayman Islands Monetary Authority is responsible for monitoring jurisdictional compliance with international financial standards, and it regularly reports its findings to the territorial Government.

While the Tax Justice Network’s Financial Secrecy Index 2015 placed Cayman in the mid-range of financial secrecy arrangements, the country actively continues its international cooperation, including via global regulatory measures. In 2014 Cayman became a signatory to the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which as of July 2017 had 112 exchange of information partners; and as one of the first signatories to the Multilateral Competent Authority Agreement, Cayman committed to the automatic exchange of information through the OECD’s Common Reporting Standard. Also, work is underway to extend the UN’s Convention Against Corruption, with includes key features of combating bribery, money laundering and corruption in the public sector.

Also, in accordance with the G20 High Level Principles on Beneficial Ownership, on 1 July 2017 Cayman enacted legislation that enhances its beneficial ownership regime. The regime, which has been in place for more than 15 years, has undergone previous improvements. However, with this latest technological enhancement, Cayman is improving the speed in which it provides beneficial ownership information to UK law enforcement authorities that have a legitimate right and legitimate reason to have access to, and use, such information.

Read the information provided on our Bribery and corruption page..

4. Terrorism

There is a low threat from terrorism, but you should be aware of the global risk of indiscriminate terrorist attacks, which could be in public areas, including those frequented by expatriates and foreign travellers.

5. Protective Security advice and Organised Crime

Crime rates are low. Burglary and theft are the most common. Sensible precautions should be taken to protect personal safety and belongings. Do not leave valuables lying about. Use a hotel safe or a safety deposit box where possible. Take particular care of your passport as this can’t be renewed or replaced in the Cayman Islands. Report the theft or loss of your passport immediately to the police (from whom a written report must be obtained). In a genuine emergency, the Cayman Islands Passport Office may be able to issue an Emergency Passport. See latest FCDO Travel Advice.

6. Intellectual property

The Cayman Islands intellectual property legislation has been updated and the new legislation came into effect on August 1st 2017. With the new legislation in place persons can now file trade mark applications directly with the Cayman Islands Intellectual Property Office (CIIPO) without having to first register in the UK or the EU. Also for the first time persons will have the option to file for protection of a Design Right in the Islands. This process is facilitated through the same procedure as that of Patents which will continue to be registered locally byway of extension if the Patent or Design has already been registered in the UK or EU.

All filings must be done through a locally licensed IP Agent and a complete list of agents can be obtained from CIIPO’s website.

On June 1st 2016, Part 1 of the UK Copyright, Designs and Patent Act 1988 (including Schedule ZA1 and Schedule 1 of the Act) was extended by Order to the Cayman Islands allowing for the first time protection of copyrights in many areas such as software and reciprocal rights in some 180 other jurisdictions. The Cayman Islands Government has also requested the UK’s assistance to reform its patent legislation. This will involve extending the UK Patents Act to the Cayman Islands. Once the Act has been extended to the Cayman Islands, the UK will apply to the World Intellectual Property Organization to extend the Patent Cooperation Treaty to the Cayman Islands.

7. Contact Us

Enquiries can be sent to staffoff@candw.ky