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Cayman urges new laws to boost offshore business

Cayman urges new laws to boost offshore business

The Cayman Islands leader is calling for speedy changes to local immigration laws that he says are needed to avoid an exodus of international companies and financial service jobs.
Premier McKeeva Bush issued directives to immigration policymakers to fast-track three- to five-year work permits for foreign finance personnel and shorten a period of required absence from the British Caribbean territory for expatriates.
"These immigration changes are important for the survival of the Cayman Islands economy," Bush told a business conference.
The islands' current immigration rules require foreigners with work permits to leave the territory for a year following a seven-year stay before they can apply for another permit. Bush is proposing that the absence period be reduced to three or six months.
Foreign businesses have complained to Bush that it takes too much time to get work permits granted. Some senior foreign staff have been refused renewals.
Bush warned that other tax havens are aggressively marketing to Cayman's existing firms and are "bending over backwards to accommodate their staff."
Thousands of international companies and hedge funds are incorporated in offshore finance centers such as the Cayman Islands, drawn by rock-bottom rates and banking rules and laws that make it easy to move capital around the globe.
Some 80,000 companies are registered in the Cayman Islands alone, which has just 52,000 inhabitants. The offshore financial services sector accounts for about half of the territory's economy.
But there has been a "recent trend of some firms migrating parts of their business and processes away from Cayman," said Greg Bennett of the islands' Fund Administrators Association.
"While difficult market conditions was the major factor influencing the recent trend, administration firms must attract and retain highly qualified individuals from the global labor pool and, as such, immigration policies have certainly played a role," Bennett said Thursday.
Bush said business leaders have reported that "firms will increase the rate at which they relocate their staff to other countries" if the Caymans do not soften immigration rules.
The number of hedge funds anchored in the Cayman Islands in 2009 was down nearly 4 percent from 2008, according to the Ministry of Finance.
In recent months, offshore financial centers such as the Cayman Islands, the British Virgin Islands and the Bahamas have scrambled to sign new international tax treaties and defend an industry that has flourished as an alternative to tourism.
Meanwhile, U.S. and European lawmakers and regulators are considering a number of proposals aimed at cracking down on abuses and collecting more tax revenue from multinational operations.


Updated : 2021-06-18 11:37 GMT+08:00