The British overseas territory saw an increase in its number of foreign workers from 19,927 at the end of 2011 to a raised 21,000 by December 2012, according to the latest findings. These heightened numbers are most likely due to immigration laws being relaxed during that time, laws which have been expanded to include five and 10 year working permits for those who work in the reinsurance industry.
The Cayman Islands Government has also made a move to offer work permits to those foreign workers who are involved in investing in the areas property market.
These measures were set up to prevent the Government’s predicted decline in foreign workers due to the increase in work permit fees. It certainly looks as though it has been successful having counteracted the change for the better rather than the expected drop.
In the summer of last year Mckeeva Bush (the then Premier of the Caymans) had announced a controversial plan to place a tax on expats salaries. However this was quickly scrapped due to the awareness that this would scare off potential investors and workers. Therefore to counteract this movement the work permit fees were raised instead.
This steady increase of foreign workers has appeared at around the same time as the island itself has lifted its cloak of secrecy, which in turn could lead to billions of pounds leaving the territory.
It is common knowledge that the Cayman Islands have been used in the past as a tax haven for wealthy people to hide money, ensuring that it is subject to the light laundering and disclosure rules that apply to the Island. Money that is held on the Island has been able to enjoy freedom from income tax, along with capital gains and corporation tax, demonstrating just why people may want to hide their money away on the island.
Yet there has been pressure building on the Island to become more transparent and open about any investors cash so that it will be brought in line with London, Switzerland and the Channel Islands, whom have all introduced greater accountability.
In a response to these demands the Cayman Islands Monetary Authority is looking to introduce new reforms that will make all companies and their directors, which have been secret up to this point, public knowledge.
One British expat who recently moved from the Cayman Islands has stated “A lot of pressure for the transparency is coming from investors who want greater control over their money along with knowing where it is being invested. The Cayman Islands has a very strong reputation as the ultimate tax haven so this could harm the financial industry quite badly. The dilemma for these funds is where to move their money as all major financial centres are being forced to be more transparent.”
This move could release a large amount of information on people holding money on the Island and could cause a drastic problem for them in the long run, which could then turn the success enjoyed so far on its head.