The Premier and other senior government officials’ whirlwind tour at the end of last year showcasing Cayman to all the major financial centres of the world, including Singapore, New York and London, was greeted by the local financial services industry with a collective enthusiastic and positive response. Business Editor Lindsey Turnbull reports.
In a bid to ensure that the world’s most important financial centres not only understand that Cayman is open for business, but is eagerly and actively welcoming business within a sophisticated and responsive environment, Premier McKeeva Bush took to the road showcasing all that Cayman has to offer, as well as highlighting a raft of proposed changes to legislation that it is intended to strengthen business and encourage growth amongst the most difficult of economic environments.
Welcoming investment via easier immigration
Such changes on the agenda showcased at the international road shows include marked changes proposed in immigration policy to make the Cayman Islands far more conducive to welcoming new business, such as the provision of a 25 year direct investment certificate for investors with a net worth of $6 million and who have invested at least $2.4 million into the Cayman Islands or a local business. This certificate will allow the holder to work within the business they have invested in and also allow spouses and minors to reside as Cayman residents. After 25 years the certificate will be eligible for renewal or extension.
Bush has already issued directives to immigration to structure three to five year work permits for the professional staff of accredited investors in the financial services industry. Exemptions will also be offered from standard term limits (otherwise known as the rollover policy) for work permits of senior leaders of financial services firms such as CEOs, managing directors and other senior staff, under a key employee designation.
Another key move will be the implementation of investor relations officers within the Immigration Department who will be designated to help prospective investors secure office equipment, identify staff as well as support the relocation process for families. Dedicated individuals will also be on hand within Immigration to expedite work permit applications for the industry.
Private sector views: change is necessary
Cayman Finance, the umbrella financial services association that represents all local financial services associations, has been extremely active in recent months with its chairman, Anthony Travers who is also the Chairman of the Cayman Islands Stock Exchange, an active and vociferous supporter of this jurisdiction abroad.
He says: “The International Board of Cayman Finance welcomes the initiatives on immigration outlined by Premier Bush and recognises the importance of taking this message directly to the major financial centres. No doubt greater reassurance is thereby derived. It is hoped that swift implementation of these measures will be met with a “can do” attitude at board level. A swift positive and consistent response pattern will be the key to ensuring that the financial industry once again drives the economy forwards.”
Conor O’Dea, managing director of Butterfield Bank (Cayman) Ltd concurs: “I commend Premier Bush and the CI government delegation and private sector participants for undertaking this demanding trip to educate investors/service providers and business partners on what Cayman has to offer, as well as promoting the imminent changes to make Cayman a more ‘business friendly’ environment. Such initiatives are vital to the future of Cayman and particularly the financial services industry locally.”
O’Dea states that such road shows need to be undertaken on an annual basis and he encourages the Premier and government to build these road shows to have a bigger public sector/private sector representation.
“The urgent and effective implementation of the proposed immigration initiatives will be imperative to creating opportunities and growth in financial services going forward. Like it or not, Cayman needs growth to progress,” O’Dea says. “Recession is damaging for the whole community. Managed, sustainable growth is essential for the health and prosperity of the Cayman community leading to better educational and career opportunities. We need to ensure that corporate citizens have a healthy social conscience to develop the community and individuals within the community.”
CISPA President Frazer Lindsay says: “The Cayman Islands Society of Professional Accountants is fully supportive of the government's proposals on immigration which strike the right balance between expanding the financial industry and ensuring Caymanian integration. The accounting profession in Cayman has a particularly accomplished record of providing job opportunities for young Caymanian professionals and securing their advancement. We believe these proposals will enhance our ability to do so in the future. The approach outlined by Premier Bush will reintroduce the essential element of stability that is missing currently and enhances the promotion of the Cayman Islands as a financial destination. We look forward to receiving the specific detail on the regulatory changes necessary to ensure the speedy implementation of these proposals in practice as we believe that prompt action is necessary to keep the financial industry on track.”
Don Seymour, managing director of company management firm dms Management is supportive of Bush and states: “The number one job of any government is to drive economic growth. Without economic growth, improvements in society like education, health, crime, environment and infrastructure cannot be achieved. We have to decide whether we want to be a financial centre or a fishing village. We excel in the hedge fund industry and it is the one thing that we can truly say that we are the best in world. It would be irresponsible for any Government to not capitalise and build on that advantage.”
Seymour says that the Premier has it right: “The number of jobs in the economy is not fixed and it is wrong to believe that if an expatriate wins a job, a Caymanian loses a job. This myth is being spun by some in our community who want to create a nation of Caymanians who are either dependent on the government for their livelihoods or become indebted to handouts. This may manipulate some votes but it represents politics at its worst.”
Seymour believes in the strength and determination of the Caymanian population to compete successfully among the global financial community and says: “Caymanians are not weak, fragile or afraid. Caymanians can confidently compete with the best in the world as we have done for generations, first as ex-pats ourselves as seamen across the world. It is insulting to that legacy for these demagogues to portray Caymanians as victims who could not cope and succeed in a growing economy. The truth is that an expansive immigration policy will increase the size and productivity of the economy and increase opportunities for all Caymanians, not just those in the financial sector.”
In particular, Seymour highlights the need to redress the consequences of government’s implementation of the rollover policy back in January 2004, and states: “The principle of the term limit was sensible, but the implementation of the rollover policy has been disastrous for the fund administration industry, resulting in the loss of many high-value jobs. I applaud the efforts of the Premier to try to reset our relationships within the international business community and restore a sense of certainty and calm to doing business in the Cayman Islands.”
Bush has stated on many occasions that the Cayman Islands “is not the only girl on the block” and that the jurisdiction must up the ante considerably to ensure that business remains and continues to grow in the financial services industry. Seymour explains further: “The EU AIFM directive has created much uncertainty throughout the industry and some firms are in motion, moving mostly to Switzerland because of lifestyle and taxation advantages, but this uncertainty is an opportunity for Cayman to be seen as a rock of stability in these uncertain times. Successful managers often have multiple offices and homes in multiple jurisdictions so while it is not realistic to think that managers would relocate to Cayman permanently, it is realistic for Cayman to become part of their lifestyle. In fact several of our clients are already exploring this option. As a small economy Cayman would only have to attract investment from a few managers to begin making a significant economic impact.”
Yet for all the support for government in this directive Seymour concludes with a few words of caution: “I like the face-to-face leadership approach of the Premier. This approach was instrumental in building great momentum in the success of the financial sector in the early 1990s. Yet I would caution that the rhetoric needs to be carefully calibrated to match the reality; the recent government budget has significantly increased the tax burden on the financial sector and the cost of doing business will still be a fundamental concern despite the personal charisma of the Premier.