Our Finance & Economy
The Cayman Islands is an international financial centre, known for investment funds, banking, insurance and other financial services and products that are regulated in accordance with global standards. The success of Cayman’s financial services is attributed to its sound regulatory regime, political and economic stability and tax neutral platform, supported by highly skilled and experienced service providers. We respect the privacy of legitimate banking while actively cooperating with over 100 countries around the world- regularly sharing information that helps stamp out global corruption.
The main industries are financial services, tourism, and real estate sales and development. Finance and Tourism are commonly referred to as the two pillars of the Cayman Islands economy.
An excerpt from the COVID-19 Economic Assessment and Stimulus Plan:
The Islands’ Gross Domestic Product (GDP) is estimated to have grown by 3.1 percent in 2019. Growth estimate is based on actual economic indicators for the first nine months of 2019, coupled with the use of full-year economic indicators where available.
The construction industry remained robust in 2019 with economic activity in the sector, expanding by 6.1 percent. Growth in the sector was indicated by a rise in imported building materials and is consistent with an increase in demand for housing and commercial properties. The economic performance of the hotels and restaurants industry was boosted by a record number of stay-over visitor arrivals (502,739) for 2019. During the period, air arrivals rose by 8.5 percent compared to 2018. Consequently, the sector is estimated to have expanded by 5.3 percent for the year.
Economic growth in 2019 precipitated an increase in labour supply. The total labour force strengthened to 49,089, an expansion of 6.3 percent over the previous year, while the unemployment rate was 3.5 percent, an uptick from a year ago.
Central government fiscal operations resulted in a surplus of $102.1 million in 2019. This surplus emanated from a 3.6 percent growth in total revenue to $860.0 million which outweighed total expenditure of $757.9 million.
Due to the significant disruptions to tourist arrivals and policy restrictions to reduce the spread of COVID-19, the Cayman Islands’ economy is projected to contract between 11.4 percent and 12.2 percent in 2020, conditional on low visitor arrivals in the last quarter of 2020 or resumption of visitor arrivals in the first quarter of 2021.
The implementation of a series of economic stimulus measures are expected to propel economic growth, increase employment and hasten the economic recovery if the full impact is realised. The Cayman Islands’ economy is projected to contract by 7.3 per cent in 2020 as opposed to 11.4 per cent without stimulus measures in 2020. Overall employment is estimated to improve to 40,003, higher by 1,468 persons.
Further details are provided here.
The Cayman Islands Government has never depended on the British Government for its recurrent budget, and all aid for capital projects has ceased for over 20 years. Cayman’s 2009 Constitution sets a limit (a certain percentage of government revenue) on the amount of money that the Government might borrow. Flexibility is given in urgent or extremely important matters.
Taxes
Following the abolition in 1985 of an annual head tax of CI$10 on all adult male residents up to 60 years, there are no direct taxes in the Cayman Islands. There is no income tax, company or corporation tax, inheritance tax, capital gains or gift tax.
There are no property taxes or rates, and no controls on the foreign ownership of property and land.
The government charges stamp duty of 7.5 per cent in most areas, on the value of real estate at sale, with reduced rates available for Caymanians. There is a 1 per cent fee payable on mortgages of less than CI$300,000, and 1 1/2 per cent on mortgages of CI$300,000 or higher.
Currency
Cayman Islands currency circulates on the three Islands. Different coloured notes come in $1, $5, $10, $25, $50 and $100 denominations. (CI$80 = US$100.) Coins (100 cents equals one dollar) are valued at 1, 5, 10, and 25 cents. American dollars (but usually not coins) are also in circulation and accepted everywhere.
Cost of Living
The cost of living is generally higher than in the United States or the United Kingdom, as most commodities are imported and have to bear the cost of freight and insurance, plus customs duty if payable.
This is partly offset by the absence of income and property taxes, but monthly rents on apartments and houses in prime areas are higher than for comparable properties in the US or UK. Gas is less expensive than in Britain, though higher than in the US. The cost of electricity and water (in properties using piped water) can also be higher than a resident of the UK or US is accustomed to.
More:
► Ministry of Finance & Economic Development
► Ministry of Financial Services
► Economics and Statistics Office