The Cayman Islands are a British overseas territory situated in the western Caribbean Sea.
Tourism and offshore financial services are the most important sectors of the Cayman Islands' economy. The Islands are one of the major international financial centers.
There are more than 200 banks registered on the Cayman Islands, including over 40 banks of the top 50 banks of the world.
|Population (2011)||56 732|
|EU Status||not part of the EU (OCT)|
|Dependent Territory Of||United Kingdom (British Overseas Territory)|
|National Currency||KYD (Cayman Islands dollar)|
|Credit Ratings (as of Sep 2016)|
|Moody's||Aa3||high grade, outlook stable|
|Withholding Tax||0.0 - 0.0%|
|Double Taxation Agreements||1 signed agreements|
|Exchange on Request||35 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 29 November 2013, Model 1|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||0 KYD|
|Country Ceiling for Deposits|
|Local Currency (Cayman Islands dollar)||Aa2||high grade|
|Foreign Currency||Aa3||high grade|
|Banking Supervision||Cayman Islands Monetary Authority|
|Banking Sector Structure|
|Number of Banks||179|
|List of Banks in Cayman Islands|
Cayman Islands is one of the OCTs (Overseas Countries and Territories) of the European Union. This means that although its nationals are in principle EU citizens, Cayman Islands is not part of the EU or directly subject to EU law.
The official currency is the Cayman Islands dollar (KYD), which is pegged to the US dollar at a fixed rate: 1 KYD = 1.25 USD.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Cayman Islands are shown in Table 1.
|Natural person, resident||0.0||0.0|
|Natural person, non-resident||0.0||0.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Cayman Islands signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Cayman Islands signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Cayman Islands and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Cayman Islands signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Cayman Islands has FATCA agreement with the U.S. in effect since 29 November 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Cayman Islands are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is non-reciprocal: the Cayman Island's financial accounts hold in U.S. financial institutions will not be reported to the Cayman Island's authorities.
FATCA and European countries
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
There is no deposit guarantee scheme in Cayman Islands
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Cayman Islands dollar) deposit ceiling for Cayman Islands is set to Aa2 (high grade), foreign currency deposit ceiling is Aa3 (high grade).
Currently there are 179 credit institutions operating in Cayman Islands.
All the credit institutions operating in Cayman Islands can be classified into several categories. Table 2 summarises the number of banks in each category.
|Category||Number of Banks|
|Category A (Banking & Trust)||7|
|Category A (Banking)||4|
|Category B (Banking & Trust)||59|
|Category B (Banking)||109|