Business in the Cayman Islands 2011

cayman islands

SPECIAL REPORT 2011

Business in the

3 Introduction with Premier Bush

10 Inside Perspective with Ogier

12 MarketTalk with KRyS Global

Photograph Camana Bay by Jim Gates

1st Floor, Cayman Corporate Centre | P.O. Box 10087 | Grand Cayman, Ky1-1001, Cayman Islands | t: (345) 945-0943 f: (345) 945-0941Visit us online at: www.dci.gov.ky or email: [email protected]

www.dci.gov.ky

Ask any of our funds, trusts, captive insurance companies or international banks why they chose to invest in the Cayman Islands and the response will beunanimous. They set up business in our jurisdiction because it offers many Competitive Advantages that make it an attractive place to do business.

Cayman offers a Supportive Business Environment backed by a stable economic and political climate, the absence of exchange controls, modern infrastructure and modern communication systems that put us on par with the best in the world.

There is Zero Taxation as the government does not impose personal or corporation income taxes and there are no taxes on profits and gains from investments. There are no property taxes or controls on foreign ownership of property either.

Our Workforce is highly educated and we enjoy one of the Highest Standards of Living in the world.

With Miami only one hour away by plane and eight major international airlines making more than 55 weekly flights into Cayman direct from the United States, Canada and England we’re Easily Accessible too.

The Department of Commerce and Investment provides valuable investment climate data and business opportunity information and guidance on regulatory procedures

for setting up a business. Call us today. We’re here to help you.

The cayman islands has maintained its status as a leading financial cen-tre for the last 20 years. This report

will focus on the hugely successful diver-

sification plan Cayman Islands Premier

McKeeva Bush, his government, and the

private sector have undertaken to make

the island a premier business destination

for 2011 and beyond.

Global Investment I Limited is pleased

to present ‘Business in the Cayman Is-

lands 2011.’ The following interview will

provide more insight into current gov-

ernment initiatives and activities under

way. It is our honour to present Cayman

Islands Premier and Minister of Finance

McKeeva Bush, OBE, JP.

in your opinion, why is cayman an attractive place to invest and do business? What are the competi-tive advantages compared to other regional and international financial jurisdictions?

It’s really a variety of factors. First and

foremost, my administration prides itself

on having a can-do attitude and I think our

pro-business environment is often a decid-

ing factor. I also believe our stable economic

and political climate, sound legal frame-

work, absence of exchange controls, mod-

ern infrastructure and the absence of any

direct taxation all work to our advantage.

Our accessibility via direct flights from

major US, UK and Canadian gateways

is something else we have in our favour.

Miami is an hour away by plane and it’s

therefore quite convenient to plan trips or

meetings here when necessary. The fact

that English is our official language and

that we operate in a similar time zone to

New York also helps.

What is government doing to attract more businesses to establish opera-tions in the cayman islands?

Given the global impact of the recent

recession, my administration realized very

early into our tenure that simply maintain-

ing the status quo of “business as usual”

would not be prudent policy. Subsequently,

when the Ministry of Finance, Tourism and

Development was formed following the

last election, it brought together talent, re-

sources and policy initiatives in a way that

seeks to create investment opportunities.

Key to these efforts is the work of the

Department of Commerce and Investment

(DCI), which stimulates and facilitates

long-term, inward and local investment

by providing technical assistance to busi-

nesses, and linking investors with poten-

tial customers, suppliers and other busi-

ness partners.

We also are aggressively pursuing new

industry segments that would comple-

ment our existing financial services and

tourism base, and yet also provide greater

diversification for our economy. As you

know, it is only by growing the range of our

product and service offerings that we will

achieve greater revenue streams that can

be used to fuel further growth.

The immediate result of these efforts

is the confirmation of two large-scale proj-

ects that will bring substantial new busi-

ness to the Cayman Islands economy:

• The Narayana Cayman Medical Cen-

tre will eventually become a 2,000-bed

medical facility to serve domestic and

international patients, spearheaded by

renowned Indian heart surgeon Dr Devi

Shetty. It will represent Cayman’s foray

into medical tourism.

• Cayman Enterprise City will be a

free-trade zone for international compa-

nies looking to take advantage of invest-

ment opportunities on our shores, focused

on the areas of technology, research and

academia, commerce and trade. With an

investment valued at over US$500 million

over the next eight years, and the potential

for over 5,000 highly skilled jobs, the ben-

efits of this development extend beyond

3

[email protected]: +44 (0)20 7125 0579F: +44 (0)20 7183 8393

Editor: Joseph BoveProject Manager: Kuljit KalerDesign: The Arland Group

Suite 404, 324 Regent Street, London, W1B 3HHRegistered in England & WalesRegistration No. 06900033

The views expressed in Business in the Cayman Islands Special Report 2011 are not necessarily those shared with the publisher, Global Investment I Limited. Wishing to reflect the true nature of the Cayman Islands , the editor has included articles from a number of sources, and the views expressed are those of the individual contributors.No responsibility or liability is accepted by Global Investment I Limited for any loss to any person, legal or physical, as a result of any statement, fact or figure contained in Business in the Cayman Islands Special Report 2011. This publication is not a substitute for advice on a specific transaction.

Introduction with Premier Bush

Hon McKeeva Bush OBE, JPPremier and Minister of Finance, Cayman Islands

4

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Introduction with Premier Bush

economic impact and into the develop-

ment of our human capital.

As the implementation phase of these

two projects draw closer, DCI will incor-

porate more of the project benefits and

business opportunities that may arise into

their marketing efforts.

What new incentives are being con-sidered and what is being done to make it easier to do business and in-vest in cayman?

Incentives are usually considered on

a case by case basis and can vary widely

depending on the project. Successful

measures that we have employed in the

past to attract new investment include

offering reductions, waivers and/or defer-

ral of licensing fees where the benefits of

the business outweigh the costs. In other

cases, things like efficiency improvements

to the process of obtaining residency cer-

tificates and visas in order to facilitate and

expedite relocations worked well, as has

expediting the turn-around time for ap-

proval on work permits.

What type of investments and indus-tries is your government looking to attract to cayman over the next 5 years? How do you look to attract these investors, industries and enti-ties? What challenges do you face in achieving your goals?

The plans for Cayman Enterprise City

are quite extensive and if things go ac-

cording to plan (and I am confident they

shall), the existence of that special eco-

nomic zone will attract companies and/or

organizations within the media, internet,

biotech, global commodities and academia

fields. On our part, the government will do

all that it can to ensure that the business

environment remains competitive and is

conducive to support growth.

Lead generation will be an on-going

process and investor targeting will be a

collaborative venture between the public

and private sector.

I have always been an avid proponent

of the fact that we cannot do this alone.

It is for this reason that we have invested

much time and resources to build and

maintain strong relationships with key

stakeholders, as these partnerships often

prove to be the most mutually beneficial

when collaboration is heightened. Cur-

rently, we are looking at ways to work more

closely with the private sector in terms of

aligning our key messages and marketing

efforts, to assure domestic and interna-

tional audiences that there is consistency

and synergy in our communication.

I think the major challenge we face

generally is that of making sure the growth

is phased properly. We are a small island

nation with a finite set of physical resourc-

es and that necessitates taking great care

to introduce change gradually. Above all

else, stability must be maintained so that

all future development is sustainable.

What message would you like to send out about cayman and the in-vestment and commerce opportuni-ties it presents?

Government and the private sector

are working more closely together than

ever, to continue expanding and improv-

ing our business climate. Cayman’s ser-

vice offerings are advanced, our political

and economic climates are stable, and our

business legislation is solid, as verified by

supranational organisations.

In short, the doors of the Cayman Is-

lands are open, and business will find a

very welcoming environment in which to

thrive. a

Offices at Camana Bay

always improvingCayman Islands Monetary Authority endures a busy 2011 but keeps up through improved efficiencies.

as in all leading countries the largest contributor to a healthy financial services sector in the cayman islands comes down to the regulator. Although this has been a conten-

tious subject in some countries, the Cayman private sector has always

been more of a partner with the Cayman Islands Monetary Authority

(CIMA) rather than an antagonist. Although Cayman is ranked num-

ber 2 amongst Captive Insurance centres worldwide, the government

introduced the Insurance Law of 2010 legislation which should only

further strengthen the islands domestic and international insurance

industries. While New York and London based firms applaud CIMA’s

speed in new fund authorisations, the Authority launches CIMACon-

nect which allows service providers to submit and track the process

through a secured online platform. Surely there are no short days

at this Authority. Cayman has signed 23 Tax Information Exchange

Agreements, three are currently being negotiated and six are in the

initial stages and a further 21 bi- and multi-lateral agreements are in

place for regulatory cooperation and information exchange. 2011 will

be a significant year in the further devel-

opment of the financial services sector but

also the government and CIMA’s vision of

extensive international cooperation and

partnerships.

The key reason for the Insurance

Law of 2010, which will be implemented

in June 2011, was that the current Insur-

ance Law in the Cayman Islands applies

uniform rules to all insurers regardless

of risk. So a Captive, despite being a

form of self-insurance, needs the same

capital, recording and disclosure, and

risk management as a local provider of car, health, and life in-

surance. Although this worked for a period of time, it has be-

come archaic and detrimental to growing other sectors within the

insurance field. For example the reinsurance industry is now in

a strong position to grow as it provides existing reinsurers and

possible capital providers the opportunity to see strong regulation

and backing within the government, which undoubtedly creates

a sense of safety and could create a more active market. While

the reinsurance industry remains a competitive field, more and

more large companies are looking at jurisdictions that provide

strong legislation, affordable lifestyle, and access to major mar-

kets. Some of the well-known jurisdictions dominating this field

have incurred fairly negative rhetoric around work permits costs

as well as housing. The major effect on the Captive market will

be the introduction of a new class of licenses based on a measure-

ment of their risk which will allow companies not very familiar

with CIMA’s operating policy to better understand their require-

ments based on whether they are classified as A, B (I), B (II), or B

(III) license. CIMA created a working group in 2006 along with in-

surance sector professionals in order to create the most effective

legislation possible, which is why Cayman is an effective jurisdic-

tion. Unfortunately for the competition of this financial centre

they will have a hard time beating the public and private sector

partnership that seems to blossom on this island.

As of October 4th, 2010 CIMA introduced a new online platform

for the fund authorisation process. CIMAConnect was born out of ef-

ficiency and careful planning. Service providers to funds are now able

to apply for access to the system, and once they are authorised users,

can submit requests for the registration or licensing of new funds on-

line from anywhere in the world. Another important feature of CIMA-

Connect is being able to track the progress of submissions and receive

instant notifications when applications are approved. For a Regulator

that is already known for speed and efficiency this new online plat-

form will only be able to bring in a higher rate of business and invest-

ment into the island at a time when more and more funds are coming

from destinations like Asia and South America.

The signing of a Memorandum of Understanding establish-

ing bilateral ties between the Cayman

Islands Monetary Authority and the

Dubai Financial Services Authority has

been a major accomplishment in 2011.

CIMA Managing Director Cindy Scot-

land signed the Memorandum of Un-

derstanding with the Dubai Financial

Services Authority, the independent

regulator of all financial and ancillary

services conducted through the Dubai

International Financial Centre. This

agreement will govern cooperation and

the exchange of information between

the organisations, something that had already been taking place

on an informal basis. Of course the real hope is that Cayman will

continue to see more business coming from the Gulf Countries, es-

pecially with the UAE where there has already been an exchange

of ideas for some time now. This also proves that while Premier

Bush does state the need for international cooperation quite often,

CIMA, and the private sector also embrace this effort.

As legislation on the proposed Alternative Investment Fund

Managers Directive (AIFM Directive) was finally signed off on by

the European Union in January 2011 the Cayman Islands and oth-

er jurisdictions now have the ability to know what lies in store

for them in 2018 and the procedures they will have to abide by.

That being said CIMA has been an instrumental voice in this pro-

cess and will continue to be a leader throughout the development

of the implementation strategies. The knowledge gained and

shared by CIMA with almost 20 years of experience in regulating

the world’s leading funds, is no doubt a great resource. The abil-

ity of Cayman to stay ahead of the competition and not rest on

already good laurels will be a hallmark of the jurisdictions under-

takings over 2011 and in the future. a

Business in the Cayman Islands

5

Camana Bay

cayman’s experience with vari-ous types of captive and alterna-tive risk structures has made us one of the top captive domiciles in the world. cayman licensed its first captive in the late 1970s and since then has maintained its position as the 2nd largest captive domicile. We have done

so through up-to-date, sensible regu-

lation facilitated through a mutually

respectful relationship between the

industry and the insurance regulators,

adherence to international standards and attention to quality. Indeed,

the Cayman Islands have set a gold standard for captive regulation

and management and our popularity is due to a flight to quality.

The Cayman Islands is recognized as being politically & eco-

nomically stable, tax neutral with a strong judiciary based on Eng-

lish Common Law. Cayman is the world’s second largest captive

domicile based on the number of licensed captives, providing solid

infrastructure, technology, top quality service providers including

captive managers, auditors, bankers & investment advisors and

lawyers. The regulatory environment is one with a framework that

recognizes the need for sound regulation predicated on a risk based

supervisory approach. IMAC, along with other interested associa-

tions, has enjoyed the pleasure of working closely with the Cayman

Islands Government and the Cayman Islands Monetary Authority in

bringing into effect the new Insurance Law of 2010 as well as the

opportu nity to provide meaningful consultation on the forthcoming

regu lations. This spirit of cooperation between all of the captive in-

surance company stakeholders along with the IMAC Forum without

question makes the Cayman Islands the premier captive domicile.

Benefits of caymanOne of the main factors is the local availability of experienced

insurance managers, lawyers, bankers and accountants; after all

we have been managing captives for over 30 years. This wealth

of knowledge gives captive directors/owners a leg-up over their

counterparts in other newer domiciles. Other benefits include:

a professional regulatory environment including the ability to

personally meet with the regulators; less stringent investment

restrictions; the ability to write third-party business; world stan-

dard anti-money laundering laws; absence of exchange controls,

and the opportunity to transact business in any major currency.

While healthcare captives represent the largest portion of our

captives, workers compensation and property are the second and

third largest sectors respectively. Cayman is also one of the leading

jurisdictions for the issuance of Insurance Linked Securities in the

form of Catastrophe Bonds from Special Purpose Vehicles (“SPV”).

These structures are created for a special defined purpose, which

once fulfilled/ expired results in the SPV being dissolved. These en-

tities tend to have a limited life of approximately one to four years

and often provide coverage for a multitude of locations and risk

types e.g. US Hurricanes, California Earthquake, Japanese Earth-

quake, California Wildfire and/or European Wind Storms.

imac’s Focus for 2011IMAC’s main focus in 2011 is the growth of the industry and an

expanded marketing program. The marketing committee is cur-

rently working with our recently appointed local Cayman market-

ing consultancy firm to update/improve our website and quarterly

newsletter, and dissemination of industry updates. Our Research &

Development Committee has been working on a num ber of initia-

tives including: production of a comprehensive Domicile comparison

chart that has been posted on IMAC’s website www.imac.ky. They

have also been working with the IMAC Executive and local Cayman

attorneys in reviewing other domiciles cell legislation with a view to

proposing some form of registered or incorporated cell provisions in

current SPC legislation.

As for the new Insurance Law, it will include a provision for

a new class of license for Reinsurers and we’re excited about the

opportunities that this may generate for the Island and our in-

dustry. As for the effect of the Law on captives, only those compa-

nies writing a substantial portion of third party business will be

affected in terms of solvency requirements. Overall, the changes

are simply meant to update the Law and there should be no sig-

nificant impact on the majority of captive insurers.

impact of Global Financial crisis on cayman captive industryWhile Cayman saw a slowdown of captive formations, as did

the many other jurisdictions, overall the premiums written and as-

sets held by our licensed captives increased. In addition, Cayman

leading Jurisdiction for captivesMonique MacDonald, Chairperson and Clayton Price, Vice Chairman of Insurance Managers Association of Cayman speak about the opportunities that Cayman presents for Captives.


6

Monique MacDonald, IMAC Chairperson

did not experience any bank failures and actually the majority of

banks with a physical presence in Cayman experienced an inward

flight to capital with a flow of funds into the Cayman Banks. Taking

into consideration some captive parents sought to either liquidate

or in cases where they owned more than one captive to amalgam-

ate their captive subsidiaries, there were 32 new incorporations in

Cayman in 2010. Therefore the net increase of 3 is not indicative

of Cayman’s success experienced in 2010. During the economic

downturn, captives were also able to assist their parent organiza-

tions with the declaration of dividends from strong surpluses that

had built up in the captives balance sheet prior to 2010. As of year-

end 2010, an increase in feasibility studies had materialized and

now the benefits of those studies are taking hold with new forma-

tions resulting and the first trimester of 2011 is off to a good start.

The hedge fund sector appears to also be mirroring the direction

of captives as the total number of funds domiciled in Cayman has

stabilized and are in fact now showing signs of growth.

moving ForwardThe on-going challenge Cayman faces is noise from the few

politicians who attempt to make fodder by perpetuating misper-

ceptions of the jurisdiction. The Cayman Islands truly is a “Com-

plete Financial Services Centre” boasting first class management

companies, auditors, lawyers bankers and investment advisors

along with a sensible regulatory regime. In the latter part of 2010,

the Cayman Islands Legislature passed the new Insurance Law

and the supporting regulations are anticipated to come into ef-

fect by the third quarter 2011. The new Law has two new Classes,

one to specifically recognize Special Purpose Vehicles which for

instance are used for Catastrophe Bonds will be Class C compa-

nies. Another new class is specifically for Commercial Reinsurers

to be designated as Class D companies. The new Law also breaks

Class B, which applies to captives, into three sections in order to

address solvency levels depending on the level of risk resulting

from unrelated open market business.

The Cayman Island’s has a robust business infrastructure,

proximity to the United States including an easy air link to the UK

and best in class service providers. These attributes coupled with

the quality of life makes the Cayman Islands a desirable place to

live and do business due to its availability of modern residences

without restrictions on property ownership, superb restaurants

and ample outdoor sports & recreational activities. Whether one

enjoys boating, scuba diving or snorkelling, playing tennis, golf or

simply relaxing on Seven Mile Beach, there are many opportuni-

ties to enjoy what Cayman has to offer for the employees of Class

D companies who seek to incorporate in the Cayman Islands.

Trends for 2011/2012Healthcare captives will continue to be what differentiates Cay-

man as the leading domicile for that industry sector. While the

healthcare sector captive is anticipated to continue to grow at a

moderate rate more and more non healthcare related captives are

also seeking to domicile in Cayman. With the catastrophic events

that have occurred in 2011, pressure to increase rates may possibly

occur which will likely bring an accelerated interest in establishing

a captive by new entrants, especially by mid-sized entities seeking

to participate in a group captives as a solution to stabilize their

insurance costs. On the topic of Solvency II, Cayman has taken a

pragmatic approach to ensure that the captive market is regulated

in a sensible manner recognizing the inherent risks of a captive

versus an open market commercial insurer are not the same. On

a worldwide basis and specifically in the United States where it’s

now easier to count the states that have not enacted captive leg-

islation versus those that have, (quite a difference from a decade

ago when one state dominated) the near term may impact service

providers attempting to provide service on a local basis. The sim-

ple fact is the captive market is one of specialists and there is a

benefit to captive owners by domiciling where a complement of

knowledgeable service providers are available within the jurisdic-

tion. Regulatory pressures brought about by Solvency II in Europe

and the Dodd Frank Act in the US, will likely have an impact. How-

ever Cayman’s continued quest to ratify bi-lateral Tax Information

Exchange Agreements (TIEAs), now standing at 23, will serve Cay-

man well. Cayman is also maintaining its status on the OECD white

list and has received favourable reviews by the OECD peer review

group. These factors should combine into a positive recipe for Cay-

man’s continued success.

cayman captive conference 2011The 2010 Insurance Managers Association of Cayman,”IMAC”

Forum was an overwhelming success with over 1040 registrants

attending. Considering the previous high-water attendee mark

stood at 867, the 2010 attendance exceeded our expectations. The

IMAC Forum Committee is working diligently to select the pan-

els of speaking topics and have over 100 topics that have been

submitted from which to choose. Some of the potential topics in-

clude: Exposures Presented by Electronic Records, Impact of Ac-

countable Care Organizations, Leveraging Technology to Reduce

Risk, Mergers & Acquisitions impact on a Captive, Wealth Transfer,

Group Captives, Cyber Liability Risks in a Captive, Property Pro-

gram Designs & Supply Chain Impact. Additional sponsors have

also expressed interest which is a tribute to the success that the

IMAC Forum has enjoyed. This year’s event will be held Tuesday

November 29 through Thursday December 1 starting with tutorial

sessions scheduled on Tuesday followed by several tracks of the

selected panels including industry leaders to speak on Wednes-

day and Thursday. This fabulous event will be held at the world

class Ritz Carlton Hotel where a preferred base rate for a garden

room of US $269 is available to IMAC member attendees and a

range of social events are also scheduled for the evenings includ-

ing one at Camana Bay and the final night beach party at the Ritz

Carlton. Please visit www.caymancaptive.ky for further details. a


7


8

The evolution of a healthy banking and financial services sector in the cayman islands has not been without key contributions from a select group of entities. Of course

sound regulation has come from the Cayman Islands Monetary

Authority but private institutions like The Caledonian Group have

played a key role in placing Cayman as the 5th largest financial

centre in the world. Established in 1970 The Caledonian Group of-

fers a comprehensive range of financial solutions to individual

and corporate clients, including administrative services for all

types of offshore companies, banks, trusts, insurance companies,

funds, and investors. The group also offers global custodial ser-

vices, worldwide correspondent banking services and investment

services making it one of the largest and most successful private

entities in Cayman over the last 40 years. Caledonian has a signifi-

cant onshore presence in London and New York, but still counts

on locations like The Isle of Man

and British Virgin Islands to

drive business. Four decades af-

ter the company was founded,

Caledonian remains positioned

to thrive and continues to con-

tribute to the economic growth

and diversification of the Cay-

man Islands and the markets

they serve.

After meeting growth targets

in 2010 Caledonian plans on in-

creasing offerings in the fund

administration and banking ser-

vice lines to grow throughout

2011/2012. This year Caledonian Global Funds Services launched an

IUF product for start-up funds and has formalised its distressed fund

consultation services with the launch of the Caledonian Distressed

Fund Advisory Group. Furthermore Caledonian Bank Limited will

add several new services in 2012, the first being trade finance. Also in

2011 Caledonian added a new company directive and management

reporting system that is being used to ensure continuous success

and enhanced productivity and performance across their global of-

fices. The investment in technology allowed Caledonian to expand

their customer base across the Americas, Europe, and the Pacific Rim

and will be a key to driving business for years to come. The fact the

Cayman Islands has been lauded by the IMF in recent years for its

strong adherence to international regulatory standards such as the

Basel Banking Supervision Standards and IOSCO standards for the

investment sector helps Caledonian facilitate and expand business

globally and to achieve growth targets.

Although the fund industry has been affected by the global

recession, service providers are now seeing growing interest and

formations of new funds in Cayman. At the end of September 2010,

9,594 funds were authorised by CIMA, down from 9,838 a year ear-

lier, but the regulator’s statistics show that the sector has been

growing again since the first quarter of last year. With increased

regulation and compliance, administrators like Caledonian Global

Fund Services are well placed to shoulder much of this burden, as

they are more in tune with the regulatory and corporate require-

ments of the jurisdiction. From the time that William S. Walker,

founder of Caledonian Group, helped the Cayman government

write much of the country’s financial services legislation some 50

years ago, the company continues to play a key role in advising

and working with CIMA in order to advance and not hinder the

Cayman economy and its main contributor the financial services

sector. The islands have stood the test of time to become one of

the most flexible, efficient and experienced hedge fund domiciles

and service jurisdictions. With the recent finalisation of the AIFM

Directive in Europe fund administrators in Cayman will sleep well

at night knowing the outcome is not what was once reported for

the jurisdiction and that CIMA currently meets much of the in-

tended criteria. In fact CIMA

has been invited to be an ad-

visor, along with other leading

jurisdictions, on the EU imple-

mentation strategy.

The banking sector in Cay-

man continues to thrive and

maintain dominance amongst

its international colleagues.

Caledonian Bank Limited con-

tinues to see strong demand

for its core services like inter-

national payment, treasury,

custody, agent bank, and credit

services. The bank has been in

business for over 20 years and maintains License “A” status in the

Cayman Islands. This status allows Caledonian Bank Limited to op-

erate domestically and off-shore. One of the few jurisdictions with

no bank failures throughout the economic slowdown Cayman’s

efforts in adhering to AML and Basel requirements have only in-

creased the jurisdictions attractiveness. For entities like Caledo-

nian Bank Limited that have significant international operations,

this only aids the marketing efforts in the America’s, Europe and

Asia. This coupled with the burdensome regulation and policies in

certain countries have left the jurisdiction and its leading knowl-

edge experts in high demand.

As the Cayman Islands continues to be known as a highly

regulated financial centre that meets the highest of international

standards, Caledonian strongly believes the strength lies in the ju-

risdictions ability to recruit the best financial services profession-

als globally. This professional infrastructure will enable Cayman,

and companies like The Caledonian Group to maintain first class

services to clients no matter their personal location. Caledonians

technology platform coupled with staff recognised as among the

best professionals in the industry, mean the company is willing,

ready, and capable of exceeding client expectations in the delivery

of premium financial services. a

a Key contributorThe Caledonian Group plans for the future after 40 years of excellence.

Caledonian House

Overall U.s. presence in the funds industry has declined from 82% to 68% in the last 10 years. What markets have taken the majority of this business?

Up until now, the decrease in

U.S. market share and increase

for Europe and Asia can be attrib-

uted to globalisation. What will

be interesting to track over the

next few years is whether there is

a notable shift away from the US

and Europe in response to the pro-

posed increased regulatory burden on investment managers. This

could distort the continued shift of managers to Asia with Asian

hedge fund market growth outpacing the general on-going eco-

nomic drift east.

Has there been heavy consolidation over the last two years? do you think with other types of funds being offered in certain jurisdictions i.e. UciTs, QiFs and siFs smaller players will have alternative vehicles for market entry and growth?

There is no doubt that there has been a heavy consolidation over

the last two years. In fact, 2010 was the first year where new hedge

fund launches outpaced fund liquidations for the first time since 2007.

The number of hedge funds totalled over 9,500 at the end of 2010 with

three quarters of funds being single manager hedge funds and the re-

mainder fund of hedge funds. The 2010 total was still below the peak

of more than 10,000 from three years earlier.

During 2010, investors evidenced an increased focus on mini-

mum assets under management (AUM) – which is traditionally

viewed as an indicator of soundness – as a factor in allocating

assets. Assets that allow smaller funds to grow tend to originate

with institutional investors and in the last few years at least half

of such investors require that a manager have US$100 million

AUM or more before allocating assets, with many actually requir-

ing significantly larger AUM of US$500 million or US$1 billion.

In terms of whether EU Undertakings for Collective Investment

in Transferable Securities (UCITS) products or the Irish Qualified

Investor Funds (QIFs) and Luxembourg Specialised Investor Funds

(SIFs) may provide smaller players with an alternative vehicle for

market entry and growth, the opposite appears true. UCITS, QIFs

and SIFs are more costly and time consuming to establish, ongo-

ing costs are higher and the strategies are limited by legislated

investment restrictions that appear to produce inferior returns

when compared to the traditional Cayman fund. By contrast, the

lower cost, speed to market and uninhibited investment strate-

gies allow managers of smaller funds, in particular, to stand out

from the crowd in attracting additional investors and assets.

What level of importance is being placed by investors right now on having independent directors, general part-ners, and trustees at the head of their structures?

Investors generally and institutional investors, in particular,

have placed greater emphasis on the role of fund directors, gener-

al partners and trustees since the start of the economic crisis. The

volume and frequency of director due diligence questionnaires,

interviews and examinations has increased and each is aimed at

allowing investors and managers to evaluate the qualification and

experience of those who will be in positions of fiduciary respon-

sibility. In addition, investors and managers are looking to the

manner in which the directors, general partners or trustees ac-

tually discharge their duties and interact with managers, service

providers and investors. The growing body of best practice guid-

ance and procedure is evolving towards broader industry stan-

dards, which ensure the implementation of effective corporate

governance; something that is in direct response to the diligence

initiatives of investors and managers.

While the emphasis on effective corporate governance and

oversight to protect the interests of the investors as a whole has

received greater attention since 2008, the process itself is evolu-

tionary for the Cayman hedge fund industry. As such, while there

may be a perception that independent directors have only recently

focused on their roles, the genuine development – and key recent

change – is the realization by investors and managers of the signifi-

cance of the role of independent directors and the increased prior-

ity which investors and managers are placing on their credentials.

With the growth of UciTs in Europe, and the wide availability to market a UciTs fund, do you feel investors will choose to select a product they perceive to have much more protection?

The “hedge fund industry” is not homogeneous and all hedge

funds do not have the same profile. The multi-billion dollar man-

agers like JPMorgan Asset Management, Brevan Howard, and MAN,

with their scale, middle- and back-office resources and distribution

networks have little in common with managers with much less as-

sets under management. For these managers, who represent the

majority of Ogier’s clients by number, any broadening of their po-

tential investor base by complying with UCITS standards is likely

to be offset by the related cost, regulatory burdens and effect on

performance. Even larger players, such as BlueCrest Capital, which

recently closed down its BlueTrend UCITS fund (one of Europe’s

largest), have found the tracking error to performance caused by

cost, regulatory and investment limitations to be unsustainable.

Similarly investors themselves have very different profiles.

The UCITS requirements are designed to protect investors. This

suits retail investors and institutional investors with a particu-

larly low tolerance for risk and volatility. For all other investors, a

UCITS fund is less of an attraction.

The reality is that even though the strictest features of UCITS

have been diluted over the years to make the product more attrac-

tive to asset managers running hedge fund strategies, UCITS stan-

dards remain more restrictive than our clients are accustomed to,

and the protective features may depress performance. For many,

if not most US managers, this will mean that they continue to be

better served by using a Cayman vehicle. a

inside Perspective:Ogier provides insight on the current state of the fund industry.


10

James Bergstrom, Partner, Ogier

www.ogier.com

Bahrain • British Virgin Islands • Cayman Islands • Guernsey Hong Kong • Ireland • Jersey • London • Tokyo

Information on the Ogier Group and details of its regulators can be accessed via our website

BVI, Cayman, Guernsey and Jersey legal and fiduciary services

Welcome to Ogier

At Ogier our vision is clear… to offer the most innovative and comprehensive multi-jurisdictional legal and administrative services, through our network of offices covering the world’s key financial centres and all time zones.

We have an established, substantive presence in the key offshore jurisdictions of BVI, Cayman, Guernsey and Jersey.

Ogier has over 800 professional and support staff, including 200 lawyers and 300 professional administrators with the strength in depth to deliver service excellence to our clients. We strive to be the best in all areas of our business and constantly seek new and creative ways to maintain our market leadership and improve our high standards of client service.

To find out more about how Ogier can assist you, please visit us at www.ogier.com or e-mail us at [email protected]

‘Best Offshore Law Firm, Cayman’ 2011Hedgeweek Awards

‘Client Choice Award, Cayman’ 2011International Law Office (ILO)

‘Private Funds Law Firm Of The Year’ 2010DealMakers Award Winner 2010

‘Offshore Law Firm of the Year’ 2010Chambers Europe Awards for Excellence

‘Offshore Law Firm of the Year’ 2009The British Legal Awards

‘Top Offshore Law Firm’ 2009Alpha Awards

‘Overall Private Funds Law Firm of the Year’ 2009ACQ Global Awards

‘Best Offshore Law Firm’ 2009HFM Week Service Provider Awards

What changes have you seen to the type of cases you are involved in since the global financial crisis? can you tell us a little bit about KRysGlobal’s role in the Fairfield sentry/ Bernie madoff case?

It could be said that the eco-

nomic downturn simply reveals

more easily the fraud and white

collar crime that already exists in

the market as capital investment

becomes scarce and investors become more sceptical about the

placement and management of their capital. We continue to see a

consistent demand for the type of work we do, whether it is asset

tracing, liquidating or conducting a forensic review.

Ken Krys and Joanna Lau of KRyS Global in the BVI are the Joint

Liquidators of Fairfield Sentry Limited (“Sentry”), Fairfield Sigma

Limited (“Sigma”) and Fairfield Lambda Limited (“Lambda”) (all in

liquidation). Sentry was a feeder fund which invested over 95% of its

assets with Bernard L Madoff Security Services (“BLMIS”). Sigma and

Lambda were two 100% feeder funds into Sentry and were respec-

tively denominated in Euro and Swiss Francs. As BLMIS operated an

elaborate ponzi scheme, all funds invested were distributed to other

BLMIS investors as redemptions and all investments thought to be

held by Sentry through BLMIS turned out to be fictitious.

On 6 May 2011 the Liquidators executed a settlement agree-

ment with Irving Picard, the US Trustee of BLMIS. The settlement

resolves the parties’ claims against each other, thereby avoid-

ing contentious, costly and uncertain litigation and it provides a

structure that enables the Liquidators and the BLMIS Trustee to

work jointly and cooperatively in seeking and obtaining recoveries

which will enhance their respective estates for the benefit of their

respective stakeholders.

KRyS Global is involved with an increasing number of cross bor-

der assignments, particularly with companies holding Asian invest-

ments or subsidiaries. An independent firm, such as KRyS Global,

often has the advantage over Big 4 firms of not being conflicted in

the large, complex cases, particularly as KRyS Global does not offer

audit and advisory services.

What trends do you see in the insolvency and restructuring industry over the next two years?

Regulatory bodies are in the process of tightening controls

and increasing corporate transparency to prevent fraud and

white collar crime. Those companies that cannot comply with the

new standards, or who are engaged in unlawful activity may find

themselves out in the cold.

Investors, unfairly or unjustly treated, may petition the court

to enforce a right belonging to the company itself and/or an indi-

vidual shareholder. A last resort for a shareholder who has been

unfairly treated is to petition the court to wind up the company on

a just and equitable basis and seek the appointment of a liquidator.

Insolvency proceedings are a

powerful tool in identifying and

recovering assets. If used prop-

erly, a liquidation involves the

appointment of an independent

professional over the person or

entity to investigate its affairs

and identify and recover assets.

A liquidator steps into the shoes

of the directors of an entity and is

entitled to information about the

company to which the directors

would have been entitled. While liquidators have duties to the

court, being independent means that they do not have any bias as

to what actions are taken to procure and control assets.

Since the introduction of the various cross border insolvency

provisions and the UNCITRAL Model Law in jurisdictions across the

world, KRyS Global has noticed an increased ease with which the

appointment of an insolvency practitioner in the offshore centres

has been granted recognition in foreign jurisdictions. As an exam-

ple, Ken Krys, in his capacity as the Official Liquidator of Fairfield

Sentry Ltd, the largest feeder fund to the Bernie Madoff investment

scheme, obtained cross-border recognition under the provisions of

Chapter 15 in the US with respect to insolvency proceedings in the

British Virgin Islands. This recognition enables the Liquidator to

investigate and identify assets located in the US or commence ac-

tions against a party located in the US and ultimately realize recov-

eries for the benefit of the entity’s stakeholders.

How did KRys Global perform in 2010? What are your goals for 2011 and 2012?

KRyS Global continued to grow and expand in 2010 and now has

over 40 professionals working from offices in four jurisdictions—

with established offices in the Cayman Islands, the Bahamas and

British Virgin Islands, and a new office opened late 2010 in Bermuda.

KRyS Global only provides insolvency, liquidation, corporate

recovery, forensic accounting and related services which enables

us to provide independent, focused and experienced service to our

clients. Our staff are experienced and qualified in the field of in-

solvency and forensics, and we ensure all engagements are carried

out by closely managed teams led by a dedicated director. Clients

benefit from these close-knit teams of Professional Accountants,

Certified Fraud Examiners, Insolvency professionals and Certified

Anti-Money Laundering Specialists. Our practical hands-on ap-

proach, along with the depth and range of experience of our profes-

sionals, ensures our clients receive answers and remedies specifi-

cally suited to meet their needs and demands.

A majority of our work has a cross border element to it, and in

this regard, KRyS Global is a member of hww insolvency coopera-

tion partners, a dedicated group of local insolvency specialists in 20

jurisdictions across the US, Europe and Asia. The groups’ objective

is to derive the best solutions in cross-border cases by working with

a number of other independent insolvency practitioners. a

marketTalk with KRys GlobalKRyS Global provides insight into the Insolvency Industry.


12

Timothy Le Cornu, Director Declan Magennis, Manager

White Collar Law Firm of the Year and International/Cross Border Law Firm of the Year in the Cayman Islands

KRyS Global, a specialized corporate recovery and insolvency firm, is a team of independent, dedicated and knowledgeable professionals with practical expertise, global experience and the ability to provide objective, sound advice. We provide solutions to complex cross-border issues in the areas of Corporate Recovery, Insolvency, Forensic Accounting and Business Advisory Services. With over 40 professionals who work from offices in four jurisdictions, our Clients benefit from a close-knit team of Professional Accountants, Lawyers, Certified Fraud Examiners and Certified Anti-Money Laundering Specialists. Through vigilance, dedication and thoroughness, we are committed to being the global leader in our industry, delivering results and achieving exceptional value for our Clients.

www.KRyS-Global.com

Global Complex Issues. Resolved.

TM

Corporate Recovery & Insolvency

Fraud Investigation & Forensic Accounting

Litigation Support

Business Valuations

Regulatory Compliance

Money Laundering Investigations

Business Advisory Services

Guiding Your Way To Success.

Cayman Islands British Virgin Islands

Bahamas Bermuda

in today’s turbulent world it’s not often you find a man who can be successful and yet so charitable. Dr. Devi Shetty

gained worldwide accreditation for successfully treating Mother

Theresa for heart disease in the 1990’s. A strong friendship en-

sued between the Doctor and his patient, and she would often

accompany him on medical rounds holding his hand and com-

forting his patients. Dr. Shetty is looked at as a saint himself for

providing thousands of medical procedures and surgeries to the

poor of his country without charge. Dr. Shetty’s Narayana Hru-

daylaya Health City in Bangalore, India, hosts the world’s largest

heart hospital, the Asia’s largest cancer hospital, and full research

centre. All of this while keeping costs low or even free in some

cases. Dr. Shetty created a Micro-insurance program several years

ago that has provided medical treatment to over 85,000 impover-

ished farmers for the cost of roughly 2 GBP a year. Maintaining a

successful business model that provides for these treatments and

still enables full operations on scale with any Western hospital

has been key for Dr. Shetty, and has not gone unnoticed. Famed

medical institutions from the Cancer Research Centres of Amer-

ica to Johns Hopkins Medical Centre have invited Dr. Shetty to

gain expertise and knowledge from him.

At the time of Dr. Shetty’s first arrival in Cayman the country

desperately needed further revenue streams from foreign direct

investment to ease pressure off the financial services and tourism

sectors. Premier McKeeva Bush initiated a meeting with local busi-

nessmen and entrepreneurs Gene Thompson and Harry Chandi.

The conversation was straight forward and purposeful and cen-

tered around attracting a large scale foreign direct investment proj-

ect that would be a major contributor to the Cayman economy and

create a host of downstream industries. They soon reasoned that

medical tourism was perfect for Cayman. An hour’s flight to Miami,

a first world locale, a 5 star leisure tourism market, a developed in-

frastructure, and a most importantly a government that supported

foreign investment. After many large scale presentations to gov-

ernment, local constituents and business people, Dr. Shetty’s vision

finally came to light. The Narayana Cayman Medical Centre will be

the largest and most costly project ever constructed in Cayman. It

will be set on 300-500 acres and will be built in phases over the next

15 years at a total cost of $2 billion dollars raised through private

financing by Dr. Shetty and his team.

The centre itself will consist of three main areas: the hospital,

a university which will train nurses, medical technicians, den-

tists, and doctors, and an assisted living community where resi-

dents’ needs will be attended to by hospital personnel. The as-

sisted living facility is garnering a lot of attention at the moment.

The industry is starting to see large scale growth due to the baby

boomer generation retiring in both the US and Europe. Spend-

ing your golden years in the Cayman Islands where sunshine is

abundant will not be a hard sell for most people especially when

the care provided is at a Western standard and priced significantly

lower than their home countries offerings. With continued in-

creases in US healthcare costs Dr. Shetty and his team will be able

to offer heart bypass surgery for nearly 60% less than healthcare

systems currently offer in the US. The track record of the organi-

sation speaks for itself and because of this negotiating deals with

US health insurers should be just another step. Narayana Cay-

man Medical Centre, once completed, is estimated to bring in be-

tween 1,200 and 2,000 additional air arrivals to Cayman every day.

While Dr. Shetty and his team will manage all business within

the medical centre there is expected to be a host of downstream

industries created. Caymanians will have the chance to start ev-

erything from medical waste disposal companies to small grocery

stores around the centre. The healthcare industry is one of the few

growing industries worldwide. The fact that Cayman lies so close

to the USA, a nation with a huge demand for low cost healthcare

with 306 million people, the opportunity to create businesses off

such a large potential customer base will be widely available. In

fact a recent study done on the projected economic impacts of

the medical centre recently done by international accounting firm

Grant Thornton suggests that:

• $150 million will be spent in Cayman in the first 2 years; includ-

ing $100 million in construction cost and $33 million in labour.

• More than $170 million will be derived in duties over the next

15 years.

• More than $270 million dollars spent on locally purchased

materials over the course of construction.

• More than $300 million will be paid to local labour over the

course of construction.

• By 2024 2,500 Caymanians are expected to be employed as

medical and operational staff.

The significant benefits the Narayana Cayman Medical Centre

will bring to the government, local citizens, and business in Cay-

man cannot be overstated. For Premier Bush this project is of ex-

treme value because he knows over time Cayman has the oppor-

tunity to be the main provider of medical tourism in the Western

Hemisphere. When thinking of strategic location and direct flight

opportunities combined with friendly people who have already

mastered 5 star customer services there really is no other country

that can currently compete with the Caymans Islands in the field

of medical tourism in this part of the world. With updated legisla-

tion already being passed by the Cayman government, the Shetty

group will begin construction this year, and the plan of saving lives

in the West through low cost healthcare is a reality in the foresee-

able future. a

medical Tourism:A Major New Industry for the Cayman Islands


14

Downtown George Town, Grand Cayman

cayman Enterprise city (cEc) is a newly proposed spe-cial Economic Zone to be developed on Grand cayman. It will be the premier free market business environment in the

western hemisphere featuring the benefits of economic freedom in

a virtually tax free environment. The plan is to create, a small low

rise yet high performance state-of-the-art campus of innovative and

sustainable architecture and designed to respect and complement

the local environment. The five campuses will be developed in three

phases comprising of 500,000 sq. feet of Class A office space.

CEC will first and foremost be a hub fostering collaboration

and innovation through commitment to knowledge based indus-

tries, education and commerce both regionally and international-

ly. It will provide a strategic and cost effective base for businesses

seeking to establish in the strategically important region of the

Americas and will address the needs of international business by

introducing a series of best-of-breed solutions to become one of

the leading Special Economic Zones (SEZ) in the world.

Leading global brands and innovative entrepreneurs will be

attracted to CEC’s inspirational, rapidly growing business commu-

nity. The project will integrate world-class retail and recreational

facilities creating the most inspirational and productive working

environment for your management and staff. CEC is not a finan-

cial services centre and will not be competing with any existing

financial services firms in Cayman. In fact CEC will be a new reve-

nue generating source for existing financial services firms in Cay-

man by enabling them to offer their client base a new and exciting

way to establish their business and invest in Cayman.

The ParksCayman Internet Park (CIP) will represent the largest Informa-

tion and Communications Technology (ICT) cluster in the region. The

ICT will host a dynamic international community of IT companies

which will include Fortune 500 brands as well as a number of grow-

ing enterprises, entrepreneurs and ventures. CIP will be a strategic

base for companies targeting emerging markets in the neighbouring

regions which cover nearly a billion people with a GDP of over US$22

trillion—representing around 30% of the world’s GDP. CIP will also

provide an environment that attracts all elements of the technology

value-chain, allowing technology companies to innovate and create

in one of the most business focused environments in the world.

• Internet and Multimedia

• Telecommunications and Networks

• IT Services

Cayman Media Park (CMP) will be the preeminent global media

centre in the Americas and will provide an advanced infrastruc-

ture and supportive environment for media related businesses to

operate globally from the Cayman Islands. As the exclusive media

hub in the Americas, Cayman Media Park will be the catalyst for

media development in the 21st century.

CMP is a place where every kind of media business can oper-

ate with collective collaboration and commitment including:

• Media and marketing companies

• Publishing

• Music, film and new media

• Leisure and entertainment

• Broadcasting and information agencies.

CayBiotech, Cayman’s Biotechnology Park will become a major

life sciences industrial cluster in the Americas and beyond. Cay-

Biotech will focus on the needs of major pharmaceutical firms as

well as companies specialized in biotechnology, R&D and phar-

macology, cosmesis and enzymes. CayBiotech codes of practice

are based on international best practices and cover all activities

from Research and Manufacturing to Health and Safety. These

Codes of Practice are in-line with those of the US Food and Drug

Administration (FDA) and World Health Organization (WHO), Eu-

ropean Agency for the Evaluation of Medicinal Products (EMEA).

The park will:

• Enjoy a strategic location with world-class infrastructure

• Be designed to attract the best life sciences companies and

facilitate their rapid development

Cayman Global Commodities Park (CGCP) will be established

to deliver a world-class and dedicated infrastructure to the com-

modities sector. A strategic initiative created to centralize the

global commodities market in the Cayman Islands. Cayman will

become the leading commodities centre in the America’s time

zone, bridging the gap between the Americas, Europe and beyond.

CGCP will actively support commodities trading by providing cut-

ting edge services including supply chain management, efficient

governance and international best practice. We will offer an ex-

tensive range of products and services covering:

• Physical commodities

• Financial markets

• ETFs and derivatives

• Creation of a dedicated market place in Cayman

• Increase value and volume of commodities traded in and

throughout the region

Cayman International Academic Park (CIAP) will be the world’s

only Technology, Communication and Commerce SEZ dedicated

to Higher Education. Established to complement the needs of pri-

vate industry within Cayman Enterprise City, CIAP will be a premier

destination for Higher Education in the region located on a fully-

appointed campus with state-of-the-art facilities. CIAP will license:

• Universities and branch universities

• Junior colleges and online universities

• Management development centres

• Education service providers

Cayman Enterprise City is set to create up to 800 jobs in the

first year alone. Over time the project is estimated to bring up

10,000 jobs into the Cayman economy, with an estimated 5,000 jobs

within the CEC zone and another 4,800 in the national economy.

Another welcomed benefit will be new management training and

career enhancement programmes which will be implemented for

Caymanians. Indeed this will begin a new era in Cayman, where

diversification from financial services and tourism will be achieved

and Cayman will be open to new innovative fields which the CEC

will house. a

cayman Enterprise cityCreating a Third Pillar in the Cayman economy.


15

By Jason Blick CEO of Cayman Enterprise City

The cayman islands have been a major jurisdiction for air-craft registration for the better part of the last 40 years. As more international companies were attracted to the islands

because of the strong financial services community and the of-

ferings they provide, the Cayman Islands government took ad-

vantage of these HNWI by offering extraordinary services. As the

capital inflow from wealthy individuals and corporations contin-

ued to flow in, the service offerings of Cayman continued to grow.

Individuals across the world found numerous advantages of reg-

istering a yacht and aircraft in the same place as their business

was licensed and accounts held.

The role of the Civil Aviation Authority of the Cayman Islands

is to function as the regulatory organisation responsible for safety

and economic oversight of the Cayman aviation industry. Their

main duty is to ensure that the aviation sector meets all stan-

dards set by the International Civil Aviation Organization (ICAO).

Of course another main activity of the CAACI is to maintain and

grow the aircraft registry which is a key driver of revenue. To this

regard the CAACI participate in industry trade shows and public-

ity events across the world and are known to operate as a registry

of choice and not convenience.

Whilst the majority of aircraft registered on the CI Registry

rarely come to Cayman. There has been an increased issuance of

operating permits to foreign registered aircraft to operate into the

territory, in fact operating permits for non-scheduled operations

such as business and leisure charters increased by over 25% from

2009 to 2010. This trend has undoubtedly increased business for

service providers such as Island Air a local ground handling and

FBO services partner of CAACI who service the foreign registered

carriers that operate into the territory. CAACI’s relationship with

Island Air is through the safety and economic regulatory role of

the CAACI to ensure that not only aircraft on the CI Register are

operated in accordance with regulations and international stan-

dards but also that foreign registered carriers/operators coming

into the territory meet the safety standards. As such the CAACI

issues an operating permit to foreign registered carriers/operators

based on requirements to operate scheduled and charter services

to the jurisdiction.

Flight to QualityA Private Look at the Aviation Industry in Cayman.


16

Photograph courtesy of Lukas Rösler

Many of these foreign registered aircraft have utilized the ser-

vices of Island Air since 1987 when the company first started op-

erations in Cayman. Island Air provides fuelling, hangar space for

aircrafts, leasing and financing of aircrafts, and arranging charter

flights. Of course when you’re dealing with fabulously wealthy

people who globe trot in their luxury aircraft the services can go

well beyond that. As Mr Cumber, CEO of Island Air, states “Time

is money for business travellers. Private charters are even more

popular among top corporate executives whose time is too valu-

able to waste in long queues at busy airports. There is no question

of delayed or cancelled flights; as the private flight is scheduled

only at the time you want. In fact some organisations don’t mind

spending an extra bit on arranging private jets for not only their

top executives but senior staff too.”

With worldwide financial troubles still looming, the trends

for the private airline industry and even registrations continue

to be uncertain. Although some HNWI’s have incurred significant

liquidity issues over the last 2 years, most have not. The industry,

just as in super yachts, has declined slightly but overall has main-

tained stability. In 2010 the CI Aircraft Registry saw most activity

come from changes in ownership, repossessions, and some de-

registrations, although the total numbers of aircraft on the reg-

istry remained stable. And while aviation trends differ depend-

ing on the sectors, with the public sector most likely to see more

consolidations as the cost of fuel goes up, the business/corporate

aviation field seems to be positive. Aircraft sales and thus registra-

tions are expected to be constant and see growth through 2011.

The interesting point about this trend, especially in the Cayman

context, is that most of the new registrations coming to the ju-

risdiction are from Europe, the Middle East, and now Asia. The

CI Aircraft Registry is mainly driven by corporate/private aircraft

and as the shift in global wealth continues to go from West to

East more and more companies and individuals are looking into

financial jurisdictions that have safely guarded the riches of the

West for some time.

CAACI regularly attends worldwide conferences to promote

Cayman aviation and attract aircrafts to its registry. CAACI reg-

ularly invites local partners on publicity trips to showcase the

strength of Cayman’s aviation sector and this year along with

Island Air, attended the European Business Aviation Conference

& Exhibition (EBACE), the premier annual meeting place for the

European business aviation community. The fact that the Cayman

Aviation industry strictly follows international standards and rec-

ommended practices as written by ICAO provides great comfort

to corporations and individuals who might use the services of

the Cayman Islands whether it be to register their private jet or

simply refuel on their way to adventure holiday in Cuba or South

America. The CAACI will no doubt remain very exclusive and se-

lective in accepting aircraft to the Cayman Islands Aircraft Regis-

try, but rest assured with the world’s security fears and increased

difficulty manoeuvring through crowded airports the private air-

craft industry is set to take off. a


17


18

cayman is a world leader in the registration of super-yachts with 75% of the vessels listed on its register being private yachts. The remaining fleet is made up of commercial

vessels including commercial yachts and a wide range of cargo

ships. As a Category 1 Red Ensign Register, Cayman is able to

register a vessel of any age, type and size, providing it meets the

requisite international standards, as well as those of the Cayman

Registry itself.

Despite economic difficulties worldwide, 2010 was a spectacu-

lar year for the Cayman Shipping Registry, and in many respects,

proved to be the best year ever since the inception of the Register

in 1903. At the end of 2010, both the total number of vessels reg-

istered and combined gross registered tonnage hit a record high.

The total number of vessels listed on the Register reached 1,870,

up from 1,815 in 2009 and gross registered tonnage increased from

3.7 million in 2009 to 3.9 million in 2010, significant tonnage figures

for a niche market registry. Furthermore, the Register managed to

attract an impressive 254 new vessels in 2010; only in 2008 did the

Register gain more registrations in a single year, with a total of 275.

The success has not come without the hard work, dedication

and expertise contributed by the team at the Cayman Registry.

Besides having a record-breaking year, the team saw the launch

of the 13-36 Passenger Yacht Code. The Cayman Registry was

instrumental in developing the new code, an initiative they led

and developed over the last three years with the support of their

colleagues in the Red Ensign Group of Administrations. The code

was developed in response to the increase in demand for larger

passenger super-yachts, which did not fit within the scope of the

existing codes. Peter Southgate, Advisor for Maritime Policy and

Legislation Development at the Cayman Registry, points out that

whilst the existing Large Yacht Code has been the accepted stan-

dard for the construction of large yachts worldwide, “The 12-pas-

senger restriction has been regarded by many as an obstacle to

progress.” Furthermore, he adds “The International Convention

for the Safety of Life at Sea (SOLAS) already contains provisions

for vessels carrying up to 36 passengers, but the current standards

were not necessarily a good fit with the design ethos and use

pat¬terns for large yachts.” Mr. Southgate clearly sees the benefits

of the Passenger Yacht Code to the large yacht industry stating,

“This enables vessels to be built to a recognised safety standard,

to accommodate up to 36 passengers in both commercial and

private use, thus allowing owners to achieve their aspirations of

luxury accommodation afloat without any compromise in safety.”

Last year, the Cayman Registry maintained ‘white list’ status

from both Paris and Tokyo MOUs. This year they also gained re-en-

try onto the Qualship 21 programme, for vessels on the top tier of

the US Coast Guard Port State Control Scheme. In addition to en-

hancing their quality within important Port State Control MOUs,

the Maritime Authority of the Cayman Islands also regained ISO

9001:2008 certification, which is globally regarded as the most

comprehensive body of standards on quality management sys-

tems and practices. In 2005, the ISO certification was voluntarily

renounced in order to eventually reflect the organisational re-

structure from a government department to a government-owned

company. MACI’s commitment to reinstate the ISO 9001:2008, fur-

ther demonstrates the organisation’s dedication to quality and

maintaining Cayman’s leadership position and world class status

in the shipping industry.

Since 2004, the Cayman Registry has been working to enhance

their global surveyor coverage as they have long recognised that

survey costs and accessibility are two critical factors for ship own-

ers when considering the choice of flag. In 2010/2011, three new

surveyor placements were made in Houston and Fort Lauderdale,

USA; and Amsterdam, Netherlands adding to the existing surveyor

coverage in George Town, Cayman Islands; Southampton, England;

Athens, Greece; Hong Kong; Antibes, France; Tokyo, Japan; Long

Beach, USA; and Genoa, Italy. Peter Southgate explains “The objec-

tive of this expansion is ultimately to create a world-wide network

of surveyors and, as far as is practicable, to ensure that a surveyor

can be economically accessed across the various time zones, keep-

ing travel time and expenses to a minimum. Additionally the sur-

veyors are on hand to provide assistance during port state control

inspections and other assistance as required by our clients.”

Another benefit of adding to their surveyor network lies in the

fact that the Cayman Registry also maintains a large portfolio of

‘new-builds’ or ships under construction. Its surveyors keep a con-

sultative eye during the entire construction phase to ensure that

all vessels are built to the highest international construction stan-

dards and regulations. The vast majority of these, upon launch,

then ‘flag’ Cayman. For new-build yachts in particular, Cayman is

the flag seen around the world and as of December 2010, there were

211 Cayman yachtsunder construction worldwide.

With signs of recovery in the global economy, the Cayman Reg-

istry is optimistic that there will be a recovery in the number of

super-yachts being built and an increase in overall size, as a result

of the newly developed 13-36 Passenger Yacht Code. They will con-

tinue their promotional activities by participating in global indus-

try events such as this year’s Monaco Yacht Show, Ft. Lauderdale

International Boat Show and be the single flag state sponsor at the

Global Superyacht Forum. CEO of MACI, A. Joel Walton, believes “It

is partly through the relationships forged through these promo-

tional initiatives that the Cayman Registry has been able to achieve

the status of global leader in the registration of super-yachts. These

are vitally important venues for us to see, and be seen in.” a

cayman shipping Registry Picks Up Pace2010 was a Great Year for Cayman Maritime, 2011 Looks Like Smooth Sailing.

F U L L A H E A D .

ARE YOU FLYING THE FLAG?

cishipping.com

4189 - Cayman Registry UK Times Ad | 210mm x 297mm (Full Page - Vertical) | CMYK | 23 July 2010 | BB&P Advertising | www.bbandp.com

Our services include: Vessel Registration; Survey and Certification; Crew Compliance; Vessel Construction Supervision; and bespoke Maritime, and related, Consultancy Services

C AY M A N | H O N G K O N G | S I N G A P O R E | M O N A C O | G R E E C E | J A P A N | U S A | U K

Today, you’ll see the Red Ensign of the Cayman Islands on ships and yachts around the world. Why?

As a Category 1 member of the prestigious Red Ensign Group, we offer vessel registration with a wide range of ownership structures, and with numerous registration options. All backed by modern and robust maritime legislation that allows flexibility and pragmatism without compromise.

With representatives in all the main international shipping centres, you enjoy the highest standard of service, expertise and efficiency - whenever and wherever you need it.

The cayman islands, enjoys a high degree of political, economic and social stability. One hour south of Miami, Grand

Cayman has direct airlift and jet service to over 14 cities in North

America, Central and South America and Europe. The Cayman

Islands impose no direct taxes - no property, inheritance, gift,

corporation, capital gains, value added, sales or income taxes.

The only duty real estate buyers are required to pay is a onetime

stamp duty (currently between 6-7.5%) within 45 days of closing

for transfer of title. All land in the Cayman Islands is recorded in a

single registry under a unique block and parcel number. The land

registry is maintained by the government which effectively guar-

antees title, so title insurance is not necessary.

The Cayman Islands is the fifth largest financial centre in

the world. In the past decade the Cayman Islands has diligently

worked to enhance its reputation as a professional, well-regulated

jurisdiction and has enacted anti-money laundering legislation.

Property purchaser may still choose to keep their ownership pri-

vate. Properties may be held in easily set up Cayman corporations

or trusts, keeping beneficial ownership confidential. There is no re-

striction on foreign purchasers’ setting up a corporation or trust. A

purchaser in today’s market can afford themselves with a substan-

tially attractive inland property for USD200,000 to a multi-million

dollar property high on a cliff or right next to a soft coral sandy

beach. The variety of property selection is fabulously abundant. We

really do feel that the Cayman Islands real estate is extremely good

value for the investor’s money and comparative to the immediate

geographical countries, property is tremendously well priced.

cayman islands ResidencyGrand Cayman boasts a vibrant community of both full and

part-time residents who are successful businesspeople, inves-

tors and entrepreneurs, and the Island encourages residency

applications which provides a key into this very close knit but

friendly community. Property owners can simply apply for per-

manent residency, which allows you to spend unrestricted time

in the Cayman Islands. The only requirements are property own-

ership exceeding KYC750,000 (USD915,000), a onetime fee of ap-

proximately USD18,000, a clean police record and strong bank

and personal references.

market Performance The Cayman property market has fared very well during the

global down turn proportional to the global market, Cayman Is-

lands properties have held their value better than most countries

including the USA, Europe, Panama and neighbouring Islands. The

slow but definite upward trend, while not coming into a seller’s

market just quite yet, is a promising one to say the least. Having

seen the 2009/2010 market being somewhat slow while still afford-

ing our property investors with a sound investment we are now

seeing an upward movement in property prices, especially along

our prestigious Seven Mile Beach and Rum Point/Cayman Kai ar-

eas of the Island. The remainder of 2011 and coming into 2012 will

be enjoyable times for the investor/property purchasers that let us,

the Broker, assist them to make solid investment engagements.

West indies BrokersOur real estate specialists have in-depth knowledge and experi-

ence in all areas of Cayman Islands real estate market. We listen to

the our customers investment needs and concerns, evaluate long

and short term property investment agendas and make the most

astute recommendations for the protection of our customer’s in-

vestment. We are here to assist finding the perfect property be it

for a single time residential investor or a multi-level commercial

investor, it is what we do and what we enjoy and are good at.

One aspect when you are purchasing property in the Cayman Is-

lands, is that most reputable Real Estate firms are members of the

Cayman Islands Real Estate Brokers Association (CIREBA) and in turn

the MLS System (Multiple Listing System), provides the purchasing

investor the knowledge that their Broker has the access to 99% of the

properties for sale on the three Cayman Islands (Grand Cayman, Little

Cayman and Cayman Brac) and will gladly show any or all of them.

With the current USD/Sterling exchange rate, Cayman proper-

ties are very affordable. Londoners can most likely find exactly

what they are looking for, shall it be an investment property, a

part time residence or a full time residence. The natural beauty of

Cayman combined with a stable government, affluent population

and sophisticated infrastructure has contributed to one of the re-

gion’s strongest real estate markets and will continue for years to

come—let us help you find your perfect investment. a

By Malin Ratcliffe – Owner, West Indies Brokers

cayman islands Real Estate, a Great investment choiceLive the best of both worlds!


20

When the dart family first came to Grand cayman in the 1980s they saw a pristine island with good infrastructure that was ideal for investment. Years in the making, that in-

vestment has blossomed into Camana Bay with more than 300,000

square feet of office space to date, an international school, apart-

ments, shops, restaurants, cinema and soon-to-be-built homes and

condominiums. The creation is an environmentally sound, cultur-

ally sensitive live/work community that truly does flourish.

While Camana Bay offers a prestigious address to the inter-

national business community, doing business here means more

than just setting up an office; the development is fast becoming

the place where companies are taking care of business and their

employees. Consistent with its New Urbanism design philosophy

of live, work, play, the development is focusing on attracting some

of the world’s leading companies by offering not only a turn-key

headquarters solution, but also underscoring the importance of a

quality work and lifestyle environment.

Camana Bay was developed by Dart Realty (Cayman) Ltd. in col-

laboration with an exceptional team of visionaries, including ar-

chitects, city planners, landscape designers and artisans. Together,

they have created a unique community where the vibrancy of is-

land living is enhanced with the conveniences of an urban envi-

ronment. The Town Centre is the heart of Camana Bay and was

designed to be the hub for food, entertainment, fashion and fun;

events are an integral part of everyday life, with frequent concerts,

community and cultural events and family activities. This year the

Town Centre received the first annual Governor’s Award for Design

and Construction Excellence. The award recognizes projects that

encourage, foster and maintain innovation, sustainability and de-

sign excellence in the Cayman Islands.

The developer has also invested heavily in making sure that

all companies have state-of-the-art premises, technology and

business continuity amenities to rely upon. Camana Bay has all

the amenities that any large corporation would need including a

cutting-edge data centre, disaster recovery facilities, physical site

security, environmental controls and power protection to allevi-

ate the concern of operating the business through a weather crisis.

The data centre is one of the most technologically advanced and

physically secure in the region with its superior communications

infrastructure being particularly suited to the banking, financial

services, legal, accounting, insurance and retail sectors. Camana

Bay has already attracted the Caribbean headquarters of Ernst &

Young, Ogier, Grant Thornton, and others. Currently there are over

1,000 people living and working within Camana Bay and the devel-

opers recently broke ground on a new 68,000 square foot building

to house international law firm Mourant Ozannes.

For the expatriate family looking to relocate to Grand Cayman,

the Cayman International School (CIS) is a world-class education-

al facility, providing college preparatory academics and extracur-

ricular programmes to students from pre-kindergarten to Grade

12. CIS is part of a prestigious network of international academies

and the school was recently accepted into the International Bac-

calaureate programme. The campus also includes a professional

grade football pitch, two tennis courts, two basketball courts, a

25-metre swimming pool and the Arts and Recreation Centre, an

award-winning, multi-purpose building for sports and commu-

nity events.

Both economically and socially, Camana Bay has greatly im-

pacted the Cayman Islands by generating economic activity and

employment, all the while fostering a sense of community. Walk-

ing out your door, strolling down the sidewalk, stopping for coffee

and walking into a beautifully designed office building is a luxury

for anyone; doing it in the Cayman Islands is a privilege. The fact

that after leaving Camana Bay you are five minutes away from the

airport, and two minutes to Seven Mile Beach makes for a tempting

work environment. Clearly the developer is committed to Cayman,

and, as such, large corporations are willing to establish a presence

at Camana Bay. The fascinating part is that the development will

continue to grow over the next two decades far surpassing what

was once just a vision. With Dart Realty’s intuitive development

approach and sense of local culture and appeal the development

will continue to blossom with time.

For more information about establishing your business at Ca-

mana Bay, call (345) 640-4000 or email [email protected]. a

camana BayBusiness is flourishing in the Caribbean.


21

Camana Bay

The Grand Caymanian Resort Is Your Caribbean Playground!

The Grand caymanian Resort promises a world-class vacation in one of the world's most beau-

tiful destinations. luxury, convenience and fun are the hallmarks of this award-winning resort.

Gracing the shores of the north sound lagoon, you will find every amenity on site including snor-

kelling and diving, personal watercrafts, pools, huge beachfront sun terraces, restaurant and bar,

world-class golf, and concierge services...the list is endless! if you ever do feel the need to venture

away from the resort, you will discover the cayman islands legendary hospitality and friendliness

in an island environment that is refreshingly safe and welcoming.

The Grand Caymanian Resort Is Your Caribbean Playground!

The resort is built in a British-caribbean style and includes: a swimming pool, children’s pool, tennis

court, an air-conditioned restaurant and bar and a dive and water sports sundry shop. The large one

and two bedroom suites are beautifully appointed and furnished and come complete with every item

necessary for a wonderful vacation experience. The brand new phase of the Grand caymanian Resort

is now complete. The 44 unit condo-Hotel compromises of two bedroom units with most of them

providing a lock off feature. These units are offered for whole-ownership.

T: 345-949-3100 • F: 345 949-3161 • Email: [email protected] • www.grandcaymanian.ky

World Famous

Business in the Cayman Islands 2011

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