New company incorporations in the Cayman Islands remained at similar levels in 2012 to the year before in a market that continued to be impacted by tough economic conditions. But the jurisdiction is edging back towards levels last seen in 2008.
That was the conclusion of a report by Appleby, one of the world’s largest providers of offshore legal, fiduciary and administration services. Despite 13% growth in new incorporations in the first half of 2012, activity in the second half of 2012 saw a decrease.
Cayman still has some way to go to reclaim the volumes of new company registrations experienced prior to the global financial crisis, according to Appleby’s latest ‘On the Register’ report, which provides insight and data on company incorporations in offshore financial centres. However, the Cayman data also reveals that the jurisdiction continues to steadily move back towards levels last seen in 2008.
“The year was certainly buoyed by activity in the first six months of the year,” said Richard McMillan, managing director of Appleby Trust (Cayman). “And there are signs that 2013 will be a watershed year in terms of seeing a universal return to pre-2009 activity levels across the offshore jurisdictions.”
Looking at the whole of Cayman’s company register for 2012, including both active companies and those newly incorporated in 2012, registration levels were up very slightly (by 1%) on 2011, revealing that slightly more companies joined the register than left. The ongoing weakened economic conditions continued to impact the overall market in the second half of 2012. There were 37,881 new offshore company formations in the jurisdictions covered by the report, a decrease of 3.6% from the same period a year earlier, and a deeper decrease of 11% on the preceding six months in 2012.
Overall growth in new company incorporations stayed flat for the majority of jurisdictions in 2012. Ultimately, this proved to be a year of consolidation following large increases in annual new incorporations between 2009 and 2011, the report said.
“Continued uncertainty in some markets and the shift in focus from China/Asia to Africa for jurisdictions like Mauritius and the Seychelles are preventing a speedy return to the numbers of company formations recorded prior to the global economic crisis,” McMillan said.
“Add to this several major international events during the second half of 2012 including the US Presidential Elections, continued economic uncertainty in the Eurozone and the once-in-a-decade change in leadership in China, and it’s hard to be surprised at the company registrations barometer struggling to quickly improve,” he said, “but we are seeing growth in some markets.”