CAYMAN ISLANDS BANKS & OFFSHORE BANKING INFORMATION

With no direct taxation, The Cayman Islands are a thriving offshore banking & finance centre.

 The Cayman Islands offer a full range of offshore financial services and products, including: asset management and protection; commercial banking, company formation, investment management; trust & fund administration; private banking; shipping & aircraft registry with financing support services.

There are currently over 500 banks and trust companies licensed by the Cayman Islands Government to carry on banking & trust business in the Cayman Islands. Around 30 banks have the Category "A" licenses which allow them to carry on business with residents and nonresidents of the Islands. The remaining banks hold Category "B" licenses and are for the most part restricted to offshore transactions with nonresidents.

BENEFITS OF BANKING IN THE CAYMAN ISLANDS

Both institutions and clients alike are assured that establishing a bank or placing assets in Cayman, will afford them the best opportunity to maximize the potential of their assets conveniently with the added value of confidentiality, unparalleled professionalism and efficient regulation. This assurance is as a result of the high ethical standards in government and among financial service providers in addition to clear and fair laws and regulations (applied by a competent judiciary based on the English common law system).

Advantages of a Cayman Islands Bank Account

• No capital gains tax, Corporation Tax, withholding tax, property tax, payroll tax, or income tax payable by employees.

• Absence of exchange control, allowing free transfer of funds in and out of the Islands, in any currency, with equal freedom to open and maintain accounts in any currency.

• No reserve asset requirements.

• Statutory confidentiality of client information.

• Competitiveness in the Euro currency markets.

Statutory confidentiality of client information is provided by the Confidential Relationships Law, though it should be noted that the Governor in Council can authorize disclosure of information where there is evidence of criminality. This can apply to transactions effected outside Cayman if, had they taken place within the Islands, they would have constituted a criminal offense. In addition, in 1990 the Mutual Legal Assistance Treaty with the United States Government came into effect. The treaty provides for the exchange of information required in the investigation of a range of criminal activity. It excludes tax matters. The "Central Authority" for the treaty in the Cayman Islands is the Chief Justice or his designate.

OPENING A CAYMAN ISLANDS BANK ACCOUNT

While many of the banks in the Cayman Islands are involved in the movement of billions of dollars around the world in business operations, the Islands' major banks also offer opportunities for investors on a smaller scale to take advantage of Caymans tax-free climate protected by a confidentiality law which ensures privacy for all reputable transactions. This opportunity is taken up by many overseas investors who see a Cayman Islands bank account as a secure and discreet place for the deposit of funds which can earn tax free interest. There are no exchange control or reporting requirements in the Islands, and funds may be converted into other currencies and moved in an out of the Islands freely.

The major banks in Grand Cayman will open an account for a new depositor on receipt of a reference from the depositor's home banker, and for obvious reasons they will not accept large sums in cash. Funds may be deposited in US dollars, or other currencies by arrangement, and can be delivered by cheque which can take up to 17 business days to clear and by banker's draft or by telegraphic transfer. Checking or savings accounts may be opened, but the most popular method is the fixed-interest or on time deposit (usually for a minimum of US$5,000) paying the interest quoted on receipt and for an agreed time. Interest rates on the various currencies may vary daily, and schedules of them may be obtained from the major banks.

THE CAYMAN ISLANDS ARE A REPUTABLE OFFSHORE FINANCE CENTRE

Resolute measures have been taken by the Cayman Islands Government in recent years to protect and enhance the reputation of the islands as a base for offshore financial operations. This action includes the signing of a Mutual Legal Assistance Treaty with the United Kingdom and the United States aimed at narcotics-related and other crime, though specifically excluding tax offenses, which of course do not exist in the Cayman Islands. The positive outcome of this government policy has been the continued steady rise in the number and quality of banks seeking a license to have a global presence within the Cayman Islands.

Currently at least 40 of the world's top 50 banks had branches or subsidiaries in the Cayman Islands. This statistic reflects the recognition of the Islands' stature in international finance as well as its position as one of the leading centres of the global Euro-currency market. Banks licensed in the Islands represent over 60 countries. Some of the reasons influencing their decision include the Cayman Islands strong reputation for sensible regulation, professionalism, confidentiality, tax advantages, asset protection, political stability, good infrastructure and geographical location.

Government policy is to protect the Cayman Islands status as a reputable international financial centre through strict examination procedures for new licenses and close supervision of the business of existing licensees.

The main government controls are...

• The appointment of a professional Inspector of Financial Services, who leads a banking supervision team which examines all applications for licenses, makes recommendations to the Governor in Council -- the Islands' "Cabinet", which must approve all bank licenses -- and closely monitors the activities of a licensed banks.

• Strict insistence on the submission of regular returns and compliance with all Government requirements, including an external audit by approved local auditors.

• The power to revoke a license if it is found that the licensee is carrying on business in a manner detrimental to the public's interest or to the interests of depositors and other creditors.

THE CAYMAN ISLANDS TRUST LAW

This law is regarded as one of the most up-to-date pieces of legislation on the subject. It provides for the appointment and discharge of trustees, the manner in which trusts may be administered, including the powers of trustees, powers of maintenance and advancement of protective trusts, investment of trust funds, protection and identity of trustees, powers of the court to make vesting and other orders, provision for the payment of trust fiends into court, and jurisdiction of the court to vary trusts.

It also includes a new concept of an exempted trust, which has all the advantages of a Liechtenstein Anstalt. The law permits a tax-free guarantee for up to 50 years, a perpetuity period for a fixed number of years, not exceeding 100, instead of the normal life-in-being plus 21 years, and, if the trust is a discretionary trust, any tight or remedy which would in normal circumstances be vested in beneficiaries is vested in, and exercisable only by, the registrar of Trusts.

There are a few Cayman banks with Web sites at this time. One of these that does is NCB (Cayman) Limited. You may visit their website for information on setting up a Cayman Islands bank account.