Cayman's Tax Free Status
Benefits of Living in a Tax Free Jurisdiction
Currently there are people from some 125 different countries who have chosen to make the Cayman Islands their home. Be it for a few months or a lifetime, there are many positive reasons to choose Cayman to live, work and play. As Cayman is one of the world’s leading Offshore Financial Services Centres (OFC), the jurisdiction offers numerous opportunities for investment, career advancement and a high quality of life. The most obvious benefits of living in the Cayman Islands are essentially financial, though there are many others and you don’t have to be a billionaire to benefit. As a tax neutral jurisdiction no one, rich or poor, pays income or corporation tax. Finance for running the country is levied by the Cayman Islands government through various other means or indirect taxes known as fees. One of the most important of these is the duty placed on imports. As a small group of islands Cayman produces neither food nor manufactured goods. Consequently the government is able to raise significant revenue through import duties without directly taxing its people’s earnings. However, there are certain sectors of the retail market that are duty free, in particular luxury goods. From diamonds to cameras, Cayman offers some interesting bargains for those who visit and who live here.
The other major sources of government revenue come from the work-permit fees from the huge expatriate workforce, transaction fees paid by those active in the financial services sector, and the fees raised from tourists entering through the port on cruise ships or those staying in local hotels.
The tax neutral environment has given rise to an enormously successful and significant offshore financial industry which has made Cayman one of the wealthiest places in the world. With a Gross Domestic Product that is higher than that of the United States, Canada, Hong-Kong and the United Kingdom to name but a few Cayman is an attractive choice for many people for different reasons.
Political stability, the fact that the country remains a dependent territory of the United Kingdom, an adherence to law and order as well as the strict protection of assets by local government, have all played their part in creating a favourable investment regime. And many people who come to invest in Cayman choose to make the islands their home as well.
People from all walks of life and nationalities are attracted to Cayman. High net worth individuals, the new buzz term for the rich, come to invest, buy property, establish trusts and generally do better at holding on to their wealth than in their country of origin. At the other end of the scale migrants from lesser developed nations from around the world are also attracted to the enormous number if lucrative job opportunities to be found in the Cayman Islands. Workers from as near as Jamaica and as far away as the Philippines come to Cayman to take up jobs and save money, which they can send back to their respective countries where it can literally change lives. Remittances going into lesser developed nations from places like Cayman are crucial to the economic stability of many of those poorer countries.
Professional white collar workers can also benefit widely from working in Cayman in a number of ways. Never mind the great weather, somewhere to keep your boat and a dive shop at the end of the road, Cayman can be very good for your career. Lawyers, accountants and others within the financial services profession can gain invaluable experience practising in the offshore industry as it is a very specialised sector. This experience is something they can utilise the world over. As a result the sector attracts a diversely qualified and talented group of people who make Cayman their home for significant periods of time while they learn and earn.
As the islands tend to attract wealthy individuals the cost of living is relatively high, but the salaries, which are tax free, are also high so it is still possible to enjoy a comfortable life in Cayman even if you may be paying a lot more for your living expenses than in North America. For those individuals with specific experience or skills, salaries can be extremely high and with a worldwide shortage of financial experts employers will pay well to recruit and retain the best.
Real Estate Advantages
As the Cayman Islands is also a popular tourist destination with no property taxes other than stamp duty, buying real estate is generally considered a very sound investment. Properties offer good rates of return for owners and the legal and political environment protects property owner’s rights. Moreover there are no restrictions on foreigners owning property. As there are no inheritance taxes or death taxes, many individuals invest in property in Cayman to which they eventually retire.
Making the most of the tax advantages offered by the Cayman Islands usually requires the assistance of one of the numerous professionals working here that can offer advice to those living and working in Cayman to maximise the benefits. As tax legislation is continually changing in other jurisdictions and can be extremely complex it is advisable for all those living or investing in Cayman to seek advice. Even though there are no taxes in Cayman, depending on the individual circumstance you may still be required to meet certain tax obligations in your country of origin. Fortunately as Cayman is one of the world’s most successful OFCs there are more than enough experts on hand to help guide you every step of the way.