Regulation

With more than 60 years in financial services and commerce, the Cayman Islands is a leading provider of global financial services. Our longstanding culture of compliance with international standards, and our commercial advancements, are well recognised.

Regulatory bodies that set global standards to fight crimes, including tax evasion and money laundering, have verified that we comply with their standards.

This gives international investors confidence that our regime is sound. Investors are also attracted to the Cayman Islands for our political and economic stability, and our highly skilled and experienced service providers

The Cayman Islands raises public revenue by charging duties and fees. This is known as an indirect, consumption-based taxation model. The duties and fees we collect, chiefly through financial services and commerce activities, raise sufficient revenue for a high level of public services to Cayman Islands residents. 

For investors, our model allows them to pool resources for direct investment into other countries’ economies, without adding an additional layer of Cayman Islands tax that would reduce the amount available for investment. However, our model does not affect the taxing rights of other countries, as investors are still taxed in the jurisdictions in which they are tax resident, in accordance with those jurisdictions’ tax laws. This means that other countries do not lose tax revenue when investors use the Cayman Islands.

Because we believe and actively support taxes being paid where they are owed, we participate in a number of tax-cooperation frameworks primarily through the OECD, which is the standard-setter for tax cooperation globally.

These frameworks include:

•        Common Reporting Standard: The Cayman Islands is one of 130 countries that exchanges financial account information, including account balances, from their financial institutions. This is done automatically and annually.
• Economic Substance: Economic substance requires entities to notify tax authorities of their core income-generating activities, in relation to specified relevant activities; and to show they have adequate substance for these income-generating activities in the countries in which they operate.
• Country-by-Country Reporting: This requires multinational enterprises (MNE) that meet certain criteria to file a country-by-country report with tax administrations or tax authorities. The report includes the amount of revenue, profits, taxes and other indicators of economic activities for each tax jurisdiction in which the MNE does business.

More information on the Cayman Islands’ tax cooperation is here.

A key weapon in the Cayman Islands’ arsenal against financial crimes is our legal framework – the acts, regulations and guidance – that support compliance with AML/CFT (anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation) standards. 

In the Cayman Islands, the Honourable Attorney General chairs the Anti-Money Laundering Steering Group (AMLSG) that leads our AML/CFT initiatives. Because financial services and commerce can be a target for criminality, the Ministry is the AMLSG’s co-chair.

Employing a multi-agency approach to protect the local and global financial services system, the AMLSG includes members from both the public and private sectors.

More information on AML/CFT in the Cayman Islands is here. 

Beneficial Ownership

Beneficial ownership refers to individuals who ultimately own or control an entity. The ability to identify beneficial owners is a powerful tool that helps law enforcement, tax and other authorities to deter, detect, and prosecute financial and other crime. 

For more than 20 years the Cayman Islands has collected and maintained beneficial ownership information, and we have a long track record of sharing this information with national and overseas authorities. The Financial Action Task Force, which sets the global standards for AML/CFT, has recognised the effectiveness of our beneficial ownership regime. Its work in the Caribbean region is supported by the Caribbean Financial Action Task Force.

Last updated June 2024