Cayman Islands: Cayman Islands – Uniquely Positioned For Growth


  • International recognition
  • Unique benefits
  • Conclusion

The Cayman Islands has demonstrated a commitment to transparency and embraced international initiatives like no other international financial centre.

One of the key first steps in this ongoing process takes us back to 1986, when Cayman signed the Mutual Legal Assistance Treaty with the US. Since that time, Cayman has remained proactive – signing Tax Information Exchange Agreements and passing laws and regulations that ensure it remains compliant and at the forefront of international standards.

International recognition

2013 was an important and very active year during which Cayman not only continued to engage in and, in many cases lead, the implementation of global initiatives, but also a year in which its efforts were acknowledged. Late in 2013, the OECD released the latest ratings against compliance with the Financial Action Task Force Recom-mendations and recognised Cayman's compliance with the standards.

The Cayman Islands was one of only 50 jurisdictions that were considered advanced enough by the Global Forum on Transparency and Exchange of Information for Tax Purposes to have undergone a Phase 2 peer review of the practical implem-entation of its legal and regulatory framework. Of those 50, four were rated "non-compliant", two "partially compliant", 26 "largely compliant" and 18 "compliant".

Cayman is therefore just one level below the maximum rating, along with the majority of countries including the UK, the US, Germany, and the Nether-lands. This backs up the latest Inter-national Monetary Fund Country Report (December 2009) on the FATF Recommendations for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CTF), which stated in regard to Cayman that:

  • "The legal framework for combating money laundering and terrorism financing is comprehensive."
  • "...the Financial Reporting Authority (FRA), is effective and is a focal point of the AML/CTF regime."
  • "There is a strong compliance culture in the Cayman Islands".

The main regulatory body in the Cayman Islands responsible for oversight of all financial business – The Cayman Islands Monetary Authority (CIMA) – was made a full member of the International Organisation of Securities Commissions (IOSCO) in 2011.

The early adoption and commitment to international initiatives like the G5 multilateral pilot –Cayman was not only the first UK Overseas Territory to commit but the first country outside Europe – has granted us a unique position through our key participation in the steering and peer review groups actively involved in the development of specific policies regarding the implementation of these initiatives.

Finally, and also during 2013, Cayman was one of the first countries to sign a Model 1 Intergovernmental Agreement (IGA) with the US for implementation of the US Foreign Account Tax Compliance Act (FATCA), as well as a similar IGA with the UK. This decision was not arrived at lightly or without deep analysis of the implications in broad consultation with industry. Both public and private sectors agreed it was the most effective way for Cayman to implement this standard. The speed and level of involvement in arriving at and implementing this decision is a key example of how the Cayman Islands continues to position itself ahead of many other jurisdictions.

Unique benefits

While the number of financial services centres (FSCs) has grown over the last two decades, Cayman has preserved its competitive position across a number of sectors and products. There are a number of drivers that have helped Cayman to maintain this edge.

  • Legal and judicial Framework – a critical characteristic. The use of English common law and statute and English-style courts is the preferred standard in the vast majority of international transactions. Many successful FSCs are current or former territories of the UK.
  • Political stability – changes in the political landscape can affect the viability of an FSC at a higher speed than any other factor. Whether its an extreme event like a coup or a property confiscation, or just a change to rules that affect some of the key factors needed by the financial industry.
  • Access to human capital – the access to foreign labour by local financial services providers is one of the ways in which local firms can access the required human capital with the necessary skills. It is also critical to the sustainability of these FSCs that the local population is given a "fair" opportunity to train and access the industry. Cayman has historically maintained a more flexible immigration policy than its peers, probably because population growth is less problematic for Cayman than for many other jurisdictions.
  • Availability of land – without land the social cost of growth is high, and without growth the countries find themselves faced with typical fiscal and economic problems. Cayman is uniquely positioned in this regard against other territories in the region.
  • Critical mass – the international standards of regulation have seen unprecedented growth over the last 20 years and there is nothing to indicate that this trend is likely to reverse any time soon. This acts as a barrier to entry for new jurisdictions. Without the critical mass to support the regulatory framework needed for compliance, FSCs will find themselves unable to offer services or will have to impose taxes, fees and duties that effectively price them out of market.
  • Credit quality – while FSCs usually act as a conduit of funds between the investors and the destination of the investments, the credit rating of the FSC itself can add a layer of risk, and as such, its fiscal status is critical. Cayman has maintained its credit rating at the same level as before the 2008 crisis – that's something very few countries can claim.
  • Government revenue collection – in order to operate as a facilitator of international capital flows, FSCs need a government revenue collection system that facilitates those flows without taxing them on a variable basis.
  • Accessibility – financial service centres, just like any business, need to be accessible to their customers. Location is the first obvious measure of accessibility, particularly in terms of time zone, which can easily explain the correlation between FSCs in the Caribbean and "Americas" business. However, accessibility should also include language, the ability to communicate effectively with the end users, and culture. Successful FSCs must have diverse yet cohesive societies, an essential part of attracting international businesses.
  • Focus – all successful FSCs have a high dependency on the financial services industry; they also have limited natural resources, and this lack of alternatives has created a focus on developing this industry. This lack of alternatives is not an ingredient in itself, but the focus it promotes is. Financial services are a highly competitive sector, and FSCs need to remain agile and responsive to customer needs in terms of products, legislation and regulation. Financial services contribute over half of Cayman's GDP and government revenue, ensuring it receives the attention needed for its continued success.
  • Appropriate regulation – regulators needs to perform a constant balancing act. It is critical for FSCs to remain compliant but they need to avoid getting too focused on duplicating the regulatory initiatives of other regulators without understanding the effect these proposed changes might have on their own customer base – the local financial industry. CIMA has successfully navigated the changing landscape while maintaining this equilibrium.


The Cayman Islands has continued to demonstrate its commitment and ability not only to comply with global standards, but to participate actively in their definition. This leadership, together with these ten unique benefits it has as a financial services centre, promises to maintain and enhance Cayman's leadership position. .


Gonzalo Jalles is CEO of Cayman Finance. Gonzalo headed HSBC Cayman for six years before founding the Javelin Group financial services consultancy in 2012. Previously he worked in HSBC's London, Bermuda and Argentina offices as Director of International Development, MD/CEO and Chief Investment Officer respectively. He served as President of the Cayman Islands Bankers' Association from 2009 to 2012. Gonzalo has a BA in Economics, a Masters in Finance and holds a Chartered Financial Analyst designation

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions