A land of beaches, Bentleys ... and bankers galore
Tuesday 17 April 2012
Bentleys, yachts and award-winning seafood restaurants are all well known to the residents of the three islands that make up the Cayman archipelago. But mention the islands' tax status and they're likely to clam up.
The Caymans, which are a British Overseas Territory previously under Jamaican rule, are collectively the richest in the Caribbean – with a GDP per capita that is the 14th highest in the world. Not bad for 100 square miles.
By and large, their populations are dominated by the bankers, hedge-fund workers, lawyers and accountants who have moved with the financial-service firms that overpopulate the islands. Many residents are at pains to insist that dodging the taxman is low on the agenda for those who decide to place companies there or move with them – 1,000 miles away from the nearest major financial centre of New York.
Joanna Boxall, the founder of three glossy lifestyle magazines on the islands – New Resident, Good Taste and Explore Cayman – said: "People are legitimately coming down here for a nicer lifestyle. If you live in London or just outside you'll leave home at 6.30 in the morning and return at 7 to 8 at night and you don't see your young kids.
"Here you're expected in work at 8 to 8.30am and you work until 6.15pm and no weekends. It is still sunny when you've finished, you can go for a long walk down the beach and your kids can go for a swim – it is about lifestyle."
That lifestyle may well be helped by the fact that there is no direct taxation on the islands, of course. No personal-income tax, capital-gains or wealth tax to keep you worrying at night.
Residents point out that there is no minimum wage on the island and the cost of living is high. Expats aren't able to send their children to local schools, unless they work for the government, and they all tend to opt for private health care.
These kinds of payments do not tend to dent the salaries of most executives living there, though. Residents insist the Caymans are no playboy paradise. "We do have big money here but I find it difficult to tell in shorts and flip-flops whether someone has 600 million in the bank or $6," one local estate agent said. "Some people you do see driving around in Bentleys but you can never judge.
"We do have a lot of people with a lot of money who come here on vacations or have residences here and a lot do have an expensive lifestyle, but you can have a simple quality of life too. "The important thing here is lifestyle. You're waking up in sunshine every day, not like people commuting into London every day – going in in the dark and back home in the dark. It is much more relaxed."
Ms Boxall added: "The cost of living is incredibly high and a lot of people living here have not got a playboy lifestyle. They're here because it's easier. My husband moved here seven years ago and because he doesn't have to commute he can read the kids a story at night."
Island people: who's who in the Caymans
The Cayman Islands is one of the few places in the world where there are more registered businesses than people. The islands have long been considered a tax haven, with no direct corporate taxes levied on businesses. There is also no personal-income tax, no sales tax, no capital-gains tax, and no wealth tax. No minimum wage exists on the islands.
The British firms with the highest number of companies registered in the Cayman Islands – according to analysis of Companies House files by ActionAid in October 2011 – are:
37 RBS Group
24 Lloyds Banking Group
20 International Power
17 Standard Chartered
10 Man Group
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