Why the Cayman Islands Are Better For Business
Presented by Cayman Enterprise City
On February 8, 1794, the people of the Cayman Islands rescued the crews of a group of ten merchant ships. The ships had struck a reef and run aground during rough seas.
Legend has it that King George III of the United Kingdom rewarded the Caymanians with a promise never to introduce taxes as compensation for their generosity, as one of the ships carried a member of the King’s own family.
Whether this legend is true or not, the Cayman Islands have a rich history of relying on indirect taxes, making it one of the best places to do business in the world.
5 Reasons It’s Worth Relocating a Company to the Caymans
1. Life is Grand
The Cayman Islands are an English-speaking Overseas British Territory with year-round warmth and state-of-the-art infrastructure and attractions.
Grand Cayman, the largest of the three islands, has an area of about 200 km².
Its most striking features include: the shallow, reef-protected lagoon called the North Sound, as well as the famous Seven Mile Beach along the west of the island.
- GDP per capita: 14th in the world – The highest standard of living in the Caribbean.
- Ranked ‘The friendliest place on earth to live and work’ in a recent HSBC expat global survey.
- Ranked: “The Caribbean’s Best Beach” – Seven Mile Beach by Caribbean Travel & Life
2. The Ideal Business Jurisdiction
Located in the Eastern Standard Timezone and 3.5 hrs from Toronto and 3 hrs from New York City, Cayman is the ideal business jurisdiction. The island also has direct flights to London, the gateway to Europe.
The Cayman Islands have the some of the highest anti-money laundering compliance requirements and offers a pro-business regulatory environment.
The Caymans have a long history of having no direct taxes on residents and Cayman Island companies.
- No corporate tax
- No capital gains tax
- No sales tax
- No income or payroll tax
This has partly allowed the Caymans to become the sixth largest global financial centre and the #1 home to hedge funds in the world.
4. A Gateway to World-Class Companies and Services
The Cayman Islands is home to many global institutions including banking, accounting, and law firms.
Companies in the Cayman:
- 40 of 50 of the world’s top banks have branches
- The Big 4 accounting institutions
- Global law offices such as Maples & Calder
It has a world-class infrastructure, excellent schools, colleges and medical facilities, plus every conceivable form of entertainment, sporting, dining and leisure facility.
5. Special Economic Zones
The Cayman Islands have recently introduced “Special Economic Zones” that specifically cater to exempted companies, creating an alternative licensing regime, as well as a number of additional incentives for entities wishing to establish a physical presence in the Islands.
- 100% exempt from corporate, capital gains, sales, income tax and import duties
- 100% foreign ownership permitted
- Five year renewable work/residence visas granted within 5 days
- 3-4 week fast-track set-up of operations
- Intellectual Property owned offshore
- No government reporting requirements
- Strategic base with easy access to lucrative North and Latin American markets
One More Reason: Cayman Enterprise City
Cayman Enterprise City (“CEC”) is an award-winning Special Economic Zone located in the tax-neutral Cayman Islands, created for knowledge-based industries and has developed into an innovative, entrepreneurial technology hub benefiting from a tax-exempt environment.
CEC has stripped away the red-tape and financial constraints normally associated with setting up an offshore Cayman company with a physical presence. CEC enables international companies to easily and cost-effectively set up offices with staff on the ground and have a genuine offshore physical presence and generate active business income in the Cayman Islands.
How to Take the First Steps in Scaling Your Business
What are the roadblocks to achieving scale? We look at these growing pains, as well as the steps needed to get past them in scaling your business.
How to Take the First Steps in Scaling Your Business
Most entrepreneurs are hungry to bring their company to the next level.
Whether they operate a family-run business or a rapidly evolving tech startup, there is always another milestone in sight. Business owners want to their companies to make an impact with their customers and communities, and they want to keep honing their craft.
But with 27.9 million small businesses in the United States alone, there is no shortage of competition for the same pieces of the pie.
How can you take steps in scaling your business, and do what your competitors are not willing to do?
Roadblocks to Scale
Today’s infographic comes to us from Brunner Consulting, and it breaks down common roadblocks to scaling as well as potential solutions to the problem of decision fatigue.
To begin, we’ll look at a poll of U.S. small business owners, which gives perspective on the challenges most often faced by companies with fewer than 10 employees:
- Profitability (50%)
- Hiring new employees (48%)
- Growing revenue (41%)
- Cash flow (38%)
Unless a business has deep pocketbooks or is venture-backed, there are several obstacles here that may prevent companies from scaling successfully.
A lack of profitability is an obvious limitation, but it’s also clear that revenue growth, cash flow, and adding new employees can be growing pains that may derail any long-term plans.
Why is scaling your business so challenging?
It’s because most types of businesses are not really scalable to begin with. The only sustainable way to scale for most companies is to grow revenue while decreasing operating costs, and for many traditional small businesses (i.e. bakeries, restaurants, hardware stores, consulting, etc.) this can be incredibly difficult.
Even if you come up with a scalable business model, there is yet another obstacle that can prevent your from growing the right way: decision fatigue.
In a growing and evolving company, entrepreneurs can’t do everything – and when they try to make every big and small decision, it affects the quality of those decisions. It can lead to being unnecessarily risk averse, maintaining the status quo, or even avoiding decisions altogether.
Scaling Your Business: First Steps
For a business to grow, there has to be more than one decision-maker.
There are two main routes to this:
1. Delegate Responsibility
In a typical small business, employees find and diagnose problems, while owners focus on solving them. However, by delegating these day-to-day decisions to employees, it frees up owners to work on the big picture items that can fuel growth.
2. Play to Your Strengths
Entrepreneurs can’t do it all, so it’s best to play to your strengths. To do this, outsource business departments that are outside of your wheelhouse. Often those may include things like bookkeeping, marketing, customer service, or website design.
Decentralizing decision-making is one of the first steps in scaling your business – and no matter how you do this, it frees you to focus on the big problems.
The World’s Best and Worst Places for Ease of Doing Business
In some countries, launching a business is easy. In others? It’s a hassle that is littered with bureaucracy, corruption, and a lack of basic services.
The Best and Worst Places for Ease of Doing Business
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
When it comes to supporting new businesses, not all jurisdictions are created equal.
Whether it’s the basics, like hooking up electricity and registering the business, or more complex regulatory hurdles, your location can impact the success of your venture in a big way. What makes a country business-friendly, and where are the most hassle-free places to open up shop?
The Ease of Doing Business ranking, by World Bank, breaks countries’ complex regulatory ecosystems down into quantifiable components. The resulting index and ranking system is a global look at who’s making it easy to do business, and which countries are struggling.
A Global View of Doing Business
The visualization below looks at the score (0-100) of 190 economies around the world, as well as a spread between high and low scoring factors in the subindices. While two countries may have the same score, one might have a much wider “spread” which points to outlaying successes or serious challenges in their regulatory framework.
Luxembourg, for example, ranked number one in the Trading Across Borders factor, but 173rd in Getting Credit.
Note: click the graphic below of the full list to expand to a higher resolution.
View a high resolution version of this graphic.
Of the 190 economies covered in the report, New Zealand comes out on top for the third year in a row. Singapore and Denmark round out the top three.
The United States, whose ranking has been slipping in recent years, came in at 8th spot.
This ranking offers up some surprises, such as Macedonia and Georgia, which are both in the top 10. Georgia makes it easy to start a new business, and has the lowest number of procedures to get the process going.
Afghanistan had the biggest year-over-year score increase after making big strides in enhancing the legal framework for businesses.
Rwanda is ranked at a very respectable 29th place – the only low-income economy to crack the top 50.
Building the Index
The data for the ranking is compiled from over 12,500 expert contributors in 190 countries who deal with business regulations on a daily basis. The final score is based on the average of 11 factors:
- Starting a business – Procedures, time, cost, and minimum capital to open a new business
- Dealing with construction permits – Procedures, time, and cost to build a warehouse
- Access to electricity – Procedures, time, and cost required to obtain an electricity connection for a new warehouse
- Registering property – Procedures, time, and cost to register commercial real estate
- Procuring credit – Strength of legal rights index, depth of credit information index
- Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
- Paying taxes – Number of taxes paid, total tax payable as share of gross profit, and hours per year spent preparing tax returns
- Trading across borders – Number of documents, cost, and time necessary to import and export
- Enforcing contracts – Procedures, time, and cost to enforce a debt contract
- Resolving insolvency – The time, cost, and recovery rate (%) under bankruptcy proceeding
- Labor market regulation – Flexibility in employment regulation and aspects of job quality
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