Cost of Opening a Family Office in the Cayman Islands
The Cayman Islands is a highly attractive jurisdiction for setting upwardly family offices and in recent years, many ultra-high internet worth families take chosen to make the British Overseas Territory in the western Caribbean Ocean both their home and their headquarters for their global operations.
Unmarried family offices are regulated under the Securities Investment Business Human action (2020) and defined as "a legal entity or legal organisation formed in Cayman by a unmarried family to conduct securities investment business concern for or on behalf of that single family unit where the securities are not beneficially endemic by a third party; and the legal entity or legal arrangement does non hold itself out to the public as conducting securities investment business for whatsoever person except members of the unmarried family".
Cayman as an international finance centre
Cayman is a taxation neutral jurisdiction with automated financial reporting to most countries in the world via CRS and FATCA. There are no direct taxes—no income taxation, company or corporation tax, inheritance tax, capital gains or gift tax. The primary sources of the authorities's revenues are derived from stamp duty taxes on property transactions, imports, piece of work permits and tourism.
It is a financial powerhouse and the leading offshore jurisdiction for hedge funds—85% of the world's hedge funds are domiciled in the Cayman Islands. It is also a leader in the worlds of structured finance and captive insurance.
The Imf report of 2016 indicated the Cayman Islands was the world'southward fifth largest fiscal eye in terms of strange portfolio investment, worth $two.6 billion. Insurance licenses, mutual funds registration, stock commutation listings and new partnership registration have increased in 2020.
Professional services
Cayman's condition as a preferred jurisdiction for family offices is based on various factors, such every bit the stability of its government, its financial organization, safety and the respect for legitimate privacy.
As a British Overseas Territory with an excellent judicial organization, Cayman is also home to leading international businesses across the financial services sphere which tin provide local on-island professional support to all forms of family unit role. These range from international banks and asset managers to all the large offshore police force firms and the Big four accountancy firms. Such professional infrastructure is key to assist Cayman-based family offices in the modern era of mind and management and economic substance tests.
Additionally, the choice of trust companies is wide and while many single family offices may look to set up their own private trust visitor or restricted licence trust company, others volition prefer to engage with the local trust industry and employ the services of a Cayman-based trust company. Trust companies range from large international operations, to smaller independent functions, also every bit bank affiliated trust companies.
Families volition typically implement a construction involving a combination of Cayman law trusts, Cayman Foundation Companies and Cayman Exempted Companies (to serve as holding companies) to hold their international wealth. The trusts legislation in Cayman is mod, sophisticated and flexible, with STAR Trusts (a form of trust which can exist indefinitely) and reserved powers trusts (where powers, such as investment responsibilities can be conferred on specific committees, rather than the trustee) proving particularly popular in an era of circuitous bespoke trust structuring for wealth-holders.
Cayman Foundation Companies are a more contempo addition to the wealth structuring options and are a form of hybrid betwixt a trust and a Cayman Exempted Company, which are extremely flexible in terms of the various stakeholders which tin be introduced and their specific responsibilities. As expected, they are now regularly part of complex succession planning structures for wealth-holders from civil constabulary countries, particularly Latin America.
Real estate
Dissimilar other isle International Finance Centres, foreign ownership of belongings is immune and the Cayman real estate market is experiencing an unprecedented growth. Property transfers in July 2021 were the tertiary highest month transaction volume in Cayman history. In 2020, loftier end belongings sales over $3 Million increased by 356% due to the influx of wealth-holders. Holding prices today on Seven Mile Beach are as high as $2,400 per square foot.
Infrastructure
Cayman has a uniquely adult infrastructure in the region, with modern office buildings, roads and in terms of technology and communications. The Sprint Family Function, which has been based in Cayman for 30 years and is the largest real estate owner in Cayman, has invested more than $1.5 billion in new infrastructure projects in recent years.
Life in Cayman
Cayman has the lowest crime rates in the Caribbean and provides a safe place for families to live, settle and thrive. Information technology is home to more than 100 nationalities, including many wealth-holders, who enjoy an extremely high standard of living.
The healthcare standard is first-class with four.five doctors per one,000 residents. Until a contempo bout of Covid-19 community spread in September 2021, Cayman has existed every bit a chimera without whatever cases for 14 months. This success and government programmes, such as the Global Citizen Scheme, have further strengthened the appeal of establishing a base in Cayman to wealth-holders.
Residency options
There are several residency options for the wealthy looking to relocate to Cayman, which in general require either evidence of independent means, being sources of income exterior of Cayman above a certain level, or an investment in Cayman, normally in real manor or concern. Separately, their options for structuring their family unit part will depend on their specific requirements, simply in that location is a deep puddle of experienced professionals in Cayman, with the ability to relocate senior members of existing family offices as particular cases demand.
Source: https://www.campdenfb.com/article/why-cayman-islands-preferred-jurisdiction-family-offices
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