The Cayman Islands: A residency option for globally mobile HNWI

Surrounded by a turquoise colored sea and framed by white sand beaches, at first glance this 100-square-mile archipelago in the Caribbean Sea might appear to be little more than a vacation playground replete with palm trees and pina coladas. Yet, soon after touching down in this British Overseas Territory, visitors quickly learn that the Cayman Islands is a cosmopolitan community of over 135 nationalities and a place that hosts a sophisticated business community.comprising one of the top five largest offshore financial sectors on the planet, according to the University of Amsterdam.

The Economy of the Cayman Islands 

The financial services sector contributes up to 80% of the jurisdiction’s GDP and has helped Cayman earn the distinction of having one of the highest standards of living in the world due to the high paying jobs the industry attracts. With one of the lowest debt to GDP ratios in the world (the Cayman Islands recorded a government debt equivalent to 8.4 % of the country's GDP in September 2019) and a A-3 credit rating from Moody’s (reconfirmed during the second quarter of 2020), confidence in Cayman remains strong for those seeking to establish a personal or business presence.  

Tax Neutral Cayman Islands 

Cayman’s status as a tax neutral country also attracts the interest of those looking to operate a business or acquire residency. There are no corporate, income, capital gains, inheritance, value added tax or recurring property taxes in the Cayman Islands. In addition, its status as a British Overseas Territory holds appeal; the governor’s office – who is the de facto head – provides oversight for national defence, internal security, governance and the economy.

These benefits appeal to international businesses and affluent individuals, with the knowledge that they can invest in a small autonomous but not independent state that is free of the financial burden and the significant human capital responsibilities associated with national defence and domestic security. Additional peace of mind results from the UK’s ready assistance during times of crises, oversight on financial management and a higher court of appeal in Britain. UK assistance in meeting international obligations on a global stage also has tremendous value to those who live and invest in Cayman with the expectation of a continued sound regulatory environment. 

The Livability of the Cayman Islands 

The strong economy, tax neutral status and good governance of the Cayman Islands are attributes which capture the interest of potential residents, but it is often the livability resulting from this Caribbean community’s modern infrastructure that prompts people to make the move. From reliable telecommunications and utility providers to well-appointed grocery stores and extensive recreational facilities, it doesn’t take long for visitors to want to live where they vacation.  

Excellent health care services are another draw for new residents. Cayman has four hospitals, three of which are located on Grand Cayman and a fourth on Cayman Brac. There are over 1,000 health care providers in the Cayman Islands and a ratio of 4.5 doctors and 6.3 nurses per 1,000 residents. Medical insurance is mandatory for all residents and employers are required to contribute at least 50% of the cost of insurance fees for employees.

For those individuals with families who are desiring to move to a safe and stable place to live, Cayman’s education system is also a draw. There are a number of private schools providing a choice of British and American curriculums, including an international school which offers an IB programme and is part of the prestigious Round Square organization. Institutions of higher learning include a medical university, a law school and a college offering undergraduate programmes. Education in the Cayman Islands is compulsory for those aged four to 16 and is free to all Caymanian children. The literacy rate for residents over age 15 is 98%.

Families also value the safe living environment in the Cayman Islands. Boasting one of the lowest crime rates in the Caribbean, there are strict gun laws in place and approximately 400 police officers working for the Royal Cayman Islands Police Service. This unarmed service has an armed response capability.

The benefits of a safe living environment and the sophistication of the business community and local infrastructure are further enhanced by the simplicity of establishing residency in the Cayman Islands. World class service providers and an efficient civil service make the residency application process a timely and smooth exercise.

Residency by Investment

There are two ways to acquire permanent residency in the Cayman Islands: investing in real estate or making a business investment. By far, the residency by investment (RBI) in real estate is the more popular of the two options.

Residency by Investment Through Real Estate

There are two RBI through real estate programs offered by the Cayman Islands government. The first option is a Residency Certificate for Persons of Independent Means. This certificate was originally called a retirement residency certificate and as the name suggests, was suited to individuals with a desire to retire in the Cayman Islands. The second option is a Certificate of Permanent Residence for Persons of Independent Means, which provides a lifetime grant to the applicant.

The following table summarizes the features of each program.

For both of the real estate options it is important to note:

- The investment must be made in developed real estate (residential or commercial)

- There cannot be a mortgage on the property

- The stamp duty (in most instances 7.5% of the property value but excluding chattels) can be included for the purposes of calculating the investment total.

- The property transaction must be completed before the application for residency can be submitted. 

The Cayman Islands’ RBI through real estate programs differ from the citizenship by investment programs offered in other Caribbean countries with respect to the real estate options available. 

Applicants are not limited to purchasing properties in government approved projects; any real estate qualifies, provided it is already developed and can be occupied immediately.

Other benefits include the lack of restrictions on foreign ownership of property (other than the number of properties a foreign national can hold without needing a business license) and no alien landholding licenses are required. The ease of conveying property in the Cayman Islands is normally a smooth process thanks to an efficient civil service and service providers in the legal, financial and real estate industries.

International buyers are often concerned about the “security” of purchasing property abroad and in this respect, the Cayman Islands offers additional peace of mind as it operates the Torrens system of land registration. The registry records all title records and the details of all land ownership information in the Cayman Islands, together with a registry map which indicates the boundaries of each individually owned parcel of land. There is a statutory guarantee of title whereby the Cayman Islands government will pay compensation to any person who suffers a loss due to an error in the land register which cannot be rectified. On this basis, obtaining title insurance is generally considered unnecessary.

Residency by Investment in Business

There are three programs available to international investors: setting up an offshore business, making a direct investment in the Cayman Islands or establishing a substantial business presence.

Establishing an Offshore Business

An applicant can set up their own licensed business and obtain their own work permit (which can include any dependents) as long as they are doing offshore only business. For example, an individual could provide administrative support to their Canadian company (or elsewhere) from the Cayman Islands. The person could then obtain an annual work permit and apply for Permanent Residency after working in the Cayman Islands on a permit for eight years.

Certificate of Direct Investment

With this option, an individual can invest a minimum 1.2 million American dollars in a locally licensed employment generating business and be eligible to apply for a 25-year residency grant. The business can be new or established.

Residency by Substantial Business Presence

An individual can become eligible for a 25-year residency grant if they hold 10% or more shares in a company or if they are a senior manager of an exempted offshore business – largely financial services, reinsurance, captive insurance or family office.

Safe and simple process

The Cayman Islands offers a safe and sophisticated place to live and work, where doing business and establishing residency is a simple and straightforward process. It’s a place where those who have choices choose to live. As the impact of COVID-19 continues to take a toll across the globe, families are looking for options to protect health and wealth and to earn residency in jurisdictions offering stability, security and quality living standards. The Cayman Islands meets those needs.

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