For many years the Cayman Islands has attracted high net worth individuals (HNWIs) and ultra-high net worth individuals (UHNWIs) from all over the world to our shores, as a place where they can enjoy the fantastic benefits of a primary, second or perhaps third home. Cayman’s sophisticated infrastructure, its proximity to the United States, its welcoming people and its wonderful year-round warm climate make Cayman an ideal location for such individuals to enjoy with family and friends – with guaranteed sunshine!
The COVID-19 coronavirus has had a considerable impact on almost all economies around the world as governments have had to pay furloughed workers and ensure the social welfare of their people while bolstering the economy, which has required them injecting trillions of dollars of economic stimulus. But these government programs come at a hefty price tag, so it is inevitable that taxes will be raised on citizens of the US, UK, Canada and around the world, in order to pay for government stimulus.
Ultimately, this is where the Cayman Islands has the chance to shine, because now HNWI/UHNWIs and family offices have even more of a reason to relocate their family and businesses here. When once we were a popular destination for such people, we can now become a magnet, attracting people from all around the world who would seek to enjoy a better lifestyle in a tax neutral location.
In addition, the Cayman Islands has been very proactive in its handling of the COVID-19 pandemic. Many people have sought refuge here during this time and the islands will undoubtedly continue to attract more people in the near and ongoing future as this virus is globally here to stay.
In addition, Economic Substance regulations require businesses to have a solid presence on island in order to comply with global requirements. Companies (and family offices) have to be located here to take advantage of the tax neutral status by having a physical presence in this jurisdiction. By way of our residency laws, these individuals by purchasing property meet one of the requirements which give them the opportunity to apply for permanent residency in a number of categories with the ultimate opportunity of becoming Caymanian and having a backstop without impacting their current citizenship.
Cayman has already seen many HNWI/UHNWIs make this location their home, historically mainly retirees looking to enjoy the sunset of their lives in our wonderful environment. However, over the last few years, in particular, we have seen an increase in a slightly younger sub-set of wealthy individuals, those in the 30 to 50 age bracket, who bring with them young families. Unlike many Caribbean countries, Cayman provides a safe environment and lifestyle in which to base a family where they can enjoy our beautiful climate, clean waters, friendly multi-cultural environment as well as benefitting from our great schools teaching the US, UK, and international curriculums, many world-class restaurants, a wide range of sporting and leisure facilities, excellent telecommunications, and so on.
If there is one thing that we have learned through this pandemic, and thus an entirely new time of change, reflection and re-evaluation, is that more and more of us can work from anywhere in the world. This opens up the opportunity of choosing the environment in which one lives instead of being driven by one’s traditional work location. This is in part to our location where we have direct flights or a single connection to a number of financial centers and cities in the US, Canada, as well as Europe and Asia that give residents the ability to fly to required in-person meetings when necessary and still be back home, here in Cayman, for the weekend.
In my opinion, COVID-19 will be a key driver for why people act, especially when you take into consideration the fact that the number of countries offering their resident’s tax neutral status has been reducing in numbers over the last 5 to 10 years. Having more people move to the Cayman Islands and establish their businesses here is extremely important for our economic recovery post-COVID-19.
There are real benefits for this jurisdiction when individuals move here, not only bringing their families but also their critical staff. Having an office here and the people necessary to operate it has massive spin-offs for Cayman as it draws more spending within the local economy leading to more local jobs and thus, therefore, infusing the local economy.
We need to ensure that such individuals and their families are welcomed to the Cayman Islands, especially when it comes to their immigration status. They must have the security of tenure in order to put down roots here. In that way, they can create a real home in the Cayman Islands for themselves and their children to enjoy for decades to come.