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According to this recent report in USAToday, wealthy individuals who have a net worth over KY$10 million (appox. US$12 million) can now secure permanent residency in the Cayman Islands, for a one-time fee of KY$1 million (appox. US$1.2 million). The move was cited as one of the proposed amendments to the territory’s immigration legislation, in a bid to ensure Cayman’s competitiveness in the global financial services sector.

Home to most of the world’s hedge funds, Cayman Islands’ offshore financial services sector accounts for about half of the territory’s economy. The territory’s low tax rates and absence of exchange controls have prompted nearly 80,000 companies to set up operations in Cayman. However, with the crackdown on tax havens; the push for imposing direct taxes on companies and individuals; and difficult market conditions that resulted from the global financial crisis, Cayman’s appeal as an offshore financial center has dropped in recent times. Some businesses have also cited inflexible immigration rules as a major hindrance. For instance, under the current immigration law, a person is granted Permanent Residency status only if (s)he has lived in Cayman for at least eight years and satisfies other eligibility criteria. Furthermore, there were no separate residency schemes for investors. The Cayman government seems to have decided to liberalize its immigration policy to make it more attractive to overseas investors – the “$1million Permanent Residency deal” being a step in that direction.

The Cayman government has noted that Permanent Residency status for the wealthy is available in other locations and that a number of high net worth individuals might be interested in a similar residency option in Cayman. For instance, Cayman’s competitor Singapore is one such jurisdiction that offers permanent residence for wealthy investors who have $1million to invest in the economy, under its Global Investor Programme (GIP Scheme). There are also other Permanent Residency Schemes available in Singapore that cater to other categories of individuals. Singapore’s liberal immigration policy, low taxes, and business friendly climate, amongst other factors has made it one of the preferred investment destination’s in the world.

The Cayman government is revamping its immigration policy with the hope of attracting investors and revitalizing its financial services sector which is facing stiff competition from other business friendly jurisdictions.

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