CAYMAN ISLANDS (Syllabus: GS Paper 1 – Geography)

News-CRUX-10     2nd November 2023        
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Context: Cayman Islands’ recent exit from the FATF grey list is expected to bolster global private equity funds looking to invest in non-banking financial companies (NBFCs) based in India.


Cayman Islands

  • About: The Cayman Islands, a British Overseas Territory in the Western Caribbean Sea, comprises three islands: Grand Cayman, Cayman Brac, and Little Cayman, situated south of Cuba and northwest of Jamaica.
  • History: Colonized by the British during the 18th and 19th centuries and administered by Jamaica after 1863.

oIn 1959, they became a territory within the Federation of the West Indies.

oWhen the Federation dissolved in 1962, the Cayman Islands chose to remain a British dependency.

  • Language: English is the predominant language, but many residents speak local Creole dialects.
  • Geography: The Cayman Islands have low-lying geography with coral reefs.
  • Capital: George Town.
  • Currency: Cayman Island dollar.


Economy

  • The Cayman Islands have a mixed economic system and serve as a thriving offshore financial centre.
  • They are known as a tax haven because they do not impose corporate tax, attracting multinational corporations to establish subsidiary entities for tax benefits.
  • Residents enjoy a tax-free environment with no income, property, capital gains, payroll, or withholding taxes.
  • Revenue is generated through tourism-related fees, work permits, financial transactions, and import duties.
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