development of the cayman economy
DESCRIPTION
TRANSCRIPT
The Special Economic Zone Framework
Development of the
Cayman Economy
Presented by Dr. Dax Basdeo, Chief Officer
Ministry of Finance (Financial Services)
What drives economic development?
http://www2.dsu.nodak.edu/users/fernando/office/courses/ONLINE/circular_flow/Circular_Flow.gif
• Availability of skilled personnel
• Regulatory environment
• Access to international financial markets
• Availability of business infrastructure
• Access to customers
• Stability of business environment
• Government responsiveness
• Corporate tax regime
• Operational cost
• Quality of life
How do jurisdictions attract business
interest?
3
Cayman Economy
4
Financial Service
Tourism
Construction & Real Estate
• Sectors: banking, insurance, legal services,
trusts, company management, funds,
accountancy
• 55% - 65% of GDP
• CI$1.2 - $1.5 billion
• >3,200 persons employed (70% Caymanian)
• 40% of Government revenue
• 31,000 business travelers
Cayman‟s International Financial
Services Industry
5
• People
o Diversity of workforce
• Product
o Stability
o Tax neutrality
• Responsiveness of Government
o International Standards
o Innovation facilitation
Cayman‟s Strengths as an IFC
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Banks & Trust Companies
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0
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-
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Bank Laws
Bank Regs
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Offshore Insurance
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Insurance Law
Insurance Regs
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Mutual Funds
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MF Law
MF Regs
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Companies
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Companies Law
Companies Regs
Vulnerability to the Global Economy
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-4
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World Latin America and the Caribbean
• Global trends (Demand) o Market needs o Source & destination of investment flows
• The Cayman „offer‟ (Supply) o Resources o Infrastructure o Competitive advantages
Opportunities for Diversification
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Potential New Industries
• IT & Software
• Environmental technologies
• Healthcare
• Training & Education
• Creative industries
• Professional services
• Transportation & Logistics
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• Do we have the right People?
• Do we have the right framework for the Product?
o Bureaucracy o Regulatory Creep
But how do we diversify?
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Immigration & Labour Laws
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Regs
Laws
• Cayman Enterprise City
• Narayana Health City
Current Projects
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• Geographically delimited areas • „extraterritoriality‟
• Characteristics
o Administered by a single body o Offering incentives o Business physically located within zone o International business
• There are roughly 3,000 zones in 120 countries around the world
Special Economic Zones
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• Co-location within zone
• Private rather than public development
• Appropriate legal, regulatory, and institutional framework o Simplification of approvals o Foreign exchange access o No ownership restrictions
SEZ Best-Practice Framework
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• Resident vs. Exempt companies
• Cayman Islands Monetary Authority
• Immigration practice directions
• International Standards
• „Offshore‟
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Cayman Financial Services as a SEZ?
• Direct Effects o Jobs o Entrepreneurial opportunities o Sale of goods and services
• Indirect Effects o Increase in the number of households o Training & technology transfer
• Induced Effects o Greater business travel tourism
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Is the SEZ approach the right
Framework?
21
Cayman‟s Economic Growth*
-10%
-5%
0%
5%
10%
15%
20%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
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Nominal GDP
Growth
* Rough estimates
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“...when men live by trade... it is the
best product that wins, the best
performance, the man of best
judgment and highest ability...”
— Francisco d'Anconia, Atlas Shrugged
by Ayn Rand