Incentives for insurers


Incentives for insurers

Richard Munday examines how international businesses are domiciling in Cayman to take advantage of the light-touch regulation, tax-neutral jurisdiction and mature information and communications technology infrastructure.

In the last few decades, Cayman has transformed itself from a predominantly tourism-centric economy to a world-class international business centre. Many of the international businesses based there specialise in areas such as financial services, insurance, hedge fund management and captive insurance management.

With this transformation, Cayman’s business climate has evolved to be attractive to many start-ups. The primary consideration of new financial services companies, such as investment management firms and insurance providers, is the speed with which a new company can be established. The Cayman Islands Monetary Authority (CIMA)—the primary regulator of financial services companies—has a reputation for a light touch and swift action on regulatory matters. Companies are confident they can rapidly establish a functional business, in a jurisdiction supported by a friendly regulator, and embracing major international standards such as Basel II.

There is a thriving ecosystem of information and communications technology (ICT) and managed services providers (MSPs) in Cayman, all delivering a variety of ICT services on a subscription basis to businesses and promising security, privacy and service level guarantees.

Many companies are eagerly embracing this change in the ICT industry, and the benefits are numerous. A new Cayman business can lower the start-up costs associated with building its ICT infrastructure by utilising MSPs and infrastructure as a service (IaaS) providers. An established business now has alternatives to the cost of upgrading its hardware and software every few years, which will decrease the amount of capital expenditure needed.

MSPs and IaaS providers enable businesses to offload the operational burden of today’s sophisticated and customised ICT environments. This allows them to repurpose staff for revenue generation, and adds predictability to their ICT budgets. The MSP or IaaS providers are able to achieve this by spreading the cost of highly trained staff and enterprise equipment across a range of customers. This service allows clients to focus on business, and not have to manage the equipment, software, compliance and staffing issues that are inevitable with complex ICT environments.

Business parks

Cayman Enterprise City (CEC) is a special economic zone launched in February 2012 where international businesses can benefit from substantial operational cost savings, provided by unique concessions granted by the Cayman Islands Government.

“The unprecedented combination of financial incentives, unique concessions and tax benefits makes the CEC a unique proposition,” said Hilary Cahill, vice president of CEC. “In addition to those savings, companies can maximise the value creation of any intellectual property, which can be held offshore in this tax-neutral jurisdiction and licensed internationally.

“The CEC campus will consist of six business parks: Cayman Internet & Technology Park, Cayman Media Park, Cayman Commodities & Derivatives Park (with a full exchange), Cayman Biotech Park, Cayman International Academic Park and the planned Cayman Insurance Park.

“CEC is a logical hub for those wishing to access the lucrative North American market and the emerging giants of Latin America, or as a global HQ in an appropriately regulated and efficiently structured tax-neutral environment.”

CEC concessions and benefits

•  100 percent exempt from income tax for 50 years

•  100 percent exempt from corporate tax for 50 years

•  100 percent exempt from capital gains tax for 50 years

•  100 percent foreign ownership permitted

•  100 percent exempt from import duties

•  Guaranteed 10-day fast-track set up of operations

•  Five-year work/residency visa granted

•  A cost-effective strategic base of operations

•  On NY/EST time zone

•  The Cayman Islands is a great place to live and work.

The CEC provides turnkey solutions, with fully furnished and serviced office facilities including shared receptionists, concierges and all the amenities you would expect from an enterprise park. Packages include the Trade Certificate (to operate your business) and Zone Employment Certificates (five-year work/residency visas for staff), all of which can be quickly and efficiently obtained in 10 working days.

To support Cayman’s international businesses, Logic Communications has uniquely positioned itself by building a next generation MPLS Internet server network. Logic has automatic redundancy across all cable systems connecting businesses in Cayman to the rest of the world. The company focuses on providing solutions that allow existing infrastructures to integrate with these new technologies. Furthermore, with the Sarbanes-Oxley Act in mind, this approach to connectivity has meant that businesses can subscribe to services that provide 100 percent diversity and redundancy with no single point of failure.

“Our investment in Cayman’s local infrastructure utilises TeraSpan fibre technology to speed construction of the network and minimise traffic interruptions,” said Michael Edenholm, CEO of Logic. “The new local network provides companies located in George Town with local loop redundancy that complies with standards and regulations, such as those under Sarbanes-Oxley.”

Lewie Hydes, chief operating officer at Logic, explained that through the purchase of TeleCayman the company has extended its fibre footprint, which allows it to bring TV and unlimited telephone and Internet services to more of Cayman than ever before.

To augment its already extensive fibre footprint, Logic is expecting to spend more than $54 million on new fibre installations in the Cayman Islands over the next five years. “We are committed to providing world-class services to the Cayman Islands, which will not only improve telecommunications and entertainment services, but also foster economic growth, which benefits everyone in the community,” he said.

“A first class, dependable and secure telecommunications network is vital to the success of Cayman’s international business segment, and Logic plays a major role in providing this infrastructure. As the demand for capacity and data speeds increase, companies can be assured that Logic has the facilities in place to meet all of Cayman’s international bandwidth requirements for the foreseeable future,” he added.

Through business-friendly legislation aimed at fostering the offshore market and complete redundancy of ICT infrastructure, Cayman is well positioned to exceed the needs of international business today and in the future.

Richard Munday is vice president of international business development at Keytech, parent of Logic Communications. He can be contacted at:

Richard Munday’s responsibilities at Keytech include handling contract disputes, network design, regulatory filings and financial modelling. He has also worked as a global account manager, where he negotiated and won corporate contracts, worked on numerous product development projects and was the single point of contact between clients and vendors.

Cayman Funds