Online Travel Guide To Grand Cayman

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Cayman Islands Bank System

When people think of the Cayman Islands, they are usually drawn to thoughts of gorgeous beaches and stunning scenery. What they don‘t typically think of is the banking system that drives half of the islands‘ economy. Interestingly, the legendary Wreck of the Ten Sails provided the turning point for the Cayman Islands current banking establishment. As the story goes, a convoy of ten merchant ships came too close to the eastern reef of Grand Cayman and ran aground. Through heroic efforts, the islanders saved many lives, earning the attention of King George III. He then rewarded the people of the Caymans by releasing them from all taxes. While the veracity of this last part is debatable, no one questions that the no taxation policy significantly boosted Grand Cayman banking during its early years of development.

The first commercial bank, Barclays, opened in 1953 as Grand Cayman slowly began to modernize, evolve, and connect with the outside world. The next landmark came in 1966 with the passing of the Bank and Trust Companies Law, which supported the young banking industry and took advantage of tax neutrality. With this development, the industry really began to flourish, and today banking has integrated itself into the identity of the Cayman Islands. Although you may think of scuba diving and white sand beaches before "financial center", tourism and banking each drive about half of the Cayman Islands‘ economy. People from around the world visit the island not only to experience the soul-satisfying natural beauty, but to take advantage of the Grand Cayman banking system. Specifically, many visitors are attracted to the highly developed urban area of George Town, the capital city of Grand Cayman, which contains the majority of Cayman Island banks. These banks help create internal jobs and revenue for the inhabitants of Grand Cayman. Today, the Cayman Islands enjoy the position of 5th largest financial center in the planet.

So what makes banking in Grand Cayman different from the rest of the world? Tax neutrality continues to play a significant role in attracting global banking business. The Caymans collect no asset-based taxes such as income, property, withholding, payroll, capital gains, sales, or corporation; instead, a duty on imported goods, license and financial service fees, customs duties, tourism fees, and stamp duties support government revenue. Because depostiors move sums of money in and out of Grand Cayman at no cost, banking there is highly appealing to them.

This type of banking, known as "offshore banking", consists of opening an account outside of the country where you live, for reasons such as increasing privacy and security. Home governments, however, still expect those with deposits in Grand Cayman banks to pay income taxes. In the United States, for example, the IRS taxes the personal income you receive from the interest of your offshore account balance even though the Cayman Islands themselves do not collect taxes on your money. The Cayman Island banks cannot divulge any of your information without your approval due to privacy laws.

Grand Cayman banks operate in a forward-moving economy (the Caymans enjoy one of the highest standards of living in the Caribbean) backed by an extremely stable and supportive government. Because of its excellent reputation the banking industry attracts top professionals and businesses in the financial field, all with a high standard of dedication to customer service and professionalism.

Grand Cayman banks deal with private and commercial banking for local and international clients. Two different types of licenses define the type of transactions with which the banks conduct business. Type B, the more common license, permits offshore dealings with non-residents. Type A, which applies to only a few banks on the island, permits business with residents and non-residents. These include:

  • Cayman National Bank
  • Fidelity Bank
  • Royal Bank of Canada
  • Scotiabank
  • Butterfield Bank
  • CIBC Bank
  • First Carribean International Bank

The Grand Cayman banks work hard to preserve their globally renowned reputation and to build strong relationships with countries around the world. These banks also work to build personal relationships, dedicating themselves to protecting your money and maintaining total confidentiality. Anti-laundering laws, aided by extensive documentation and information for every client with an offshore account (the Know Your Client, or KYC principle), help to maintain these standards. In the past, some people used offshore banking for less than legitimate purposes – today, however, laws and highly regulated banking practices ensure that this is no longer the case. The banks of the Cayman Islands go to great lengths to ensure that depositors‘ information and funds stay safe and protected at all times.

Banking composes only a portion of the financial industry on the Cayman Islands, albeit a significant one. Others areas include the Cayman Islands Stock Exchange, insurance, vessel and aircraft registration, and structured finance. People taking advantage of the banks in the Cayman Islands rest confidently in the support of this strong infrastructure and well-developed financial system, which continue to drive the booming economy forward. The islands enjoy a reputation as one of the best offshore banking locations in the world.

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