Cayman Islands

The Cayman Islands are a British Overseas Territory in the Caribbean and one of the world's most significant offshore financial centers. The territory comprises three islands – Grand Cayman, Cayman Brac, and Little Cayman – with George Town as the capital.

• Tax policy: No income tax, corporate tax, capital gains tax, or withholding tax
• Fund domicile: Global leader for hedge funds and private equity structures
• Regulation: The Cayman Islands Monetary Authority (CIMA) oversees financial service providers
• Legal system: Common law based on English law
• Transparency: Member of international AML/CFT standards, FATF-compliant

The Cayman Islands were discovered by Christopher Columbus in 1503 and were initially known for their turtles. After a long period of British colonial rule, they began deliberately developing into an offshore financial center from the 1960s. Key milestones were the enactment of the Companies Law (1961), the Banks and Trust Companies Law (1966), and the Trusts Law (1967), which created an attractive legal foundation for international financial structures.

In the 1990s and 2000s, the fund sector grew explosively; the Cayman Islands became the preferred domicile for hedge funds worldwide. Under international pressure – particularly from the OECD, FATF, and the USA – successive anti-money laundering laws, automatic exchange of information (AEOI), and the Beneficial Ownership Transparency regime were introduced.

The Cayman Islands' regulatory framework covers:

• Registration and licensing of banks, funds, and insurers by CIMA
• Cayman Islands Mutual Funds Law and Private Funds Law (2020)
• Securities Investment Business Act (SIBA) for securities services
• Insurance Act (2010) for the insurance industry
• Anti-Money Laundering Regulations (AMLRs) and Proceeds of Crime Law
• Automatic Exchange of Information (AEOI/CRS) and FATCA reporting obligations under Model 1 IGA with the USA
• Beneficial Ownership Register (not public, but accessible to authorities)
• Economic Substance Act (2019) for relevant entities
• Virtual Asset (Service Providers) Act (VASPA, 2020) for crypto service providers
• Data Protection Act (2017) for personal data protection

Key requirements for financial service providers:

• CIMA license: Banks, fund managers, insurers, and securities service providers (SIBA) require a CIMA license
• AML/CFT: Know-Your-Customer (KYC), Enhanced Due Diligence for high-risk clients
• Economic substance: Relevant entities must demonstrate substantive activities on the islands
• FATCA/CRS: Reporting of account data for US taxpayers (under Model 1 IGA) and foreign taxpayers
• Private funds: Registration with CIMA, annual audit, and valuation reports
• Insurance: Licensing and supervision under the Insurance Act (2010)
• Data protection: Compliance with the Data Protection Act (2017)

"Cayman Islands" was classified under theme "Steuer". Correct is "Jurisdiktion". National laws and authorities are classified by subject matter, not as Jurisdiction. Country profiles are classified as Jurisdiction.

4 corrections:
- FATF grey-listing: removal was in 2002, not 2001
- Private Funds Law date wrong: February 2020, not August 2020
- Companies Law date: 1961, not 1960
- Capital city spelling: 'Georgetown' instead of 'George Town' in German text
5 clarifications.
2 notes.