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Economy and Banking Sector of the Cayman Islands

Cayman Islands
Caribbean Sea
Population  (2011)
56 732
EU Status
not part of the EU (OCT)
KYD (Cayman Islands dollar)
Nominal GDP
Credit Ratings (as of Sep 2016)
Consolidated Banking Assets
Deposit Guarantee
Number of Banks

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 150 banks registered on the Cayman Islands, including over 40 banks of the top 50 banks of the world.

List of Banks in Cayman Islands

National Currency

Cayman Islands Dollar (KYD)

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.

Pegged Rate

1 KYD = 1.25 USD

Credit Ratings (as of Sep 2016)

Fitch Moody's S&P
- Aa3 (high grade), outlook stable -

Withholding Tax

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 in the Cayman Islands: 0.0 - 0.0%

Withholding tax rates applied on payments of interest and dividends in Cayman Islands are shown in Table 1.

Dividends Interest
Natural person, resident 0.0 %0.0 %
Natural person, non-resident 0.0 %0.0 %
Table 1. Withholding tax rates in Cayman Islands.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of the Cayman Islands: 1 Signed Agreements

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):

 United Kingdom

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 35 Signed Agreements

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):

 Czech Republic (Sep 2013)
 Faroe Islands
 New Zealand
 South Africa
 United States

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):

 Belgium (Apr 2014)
 Brazil (Mar 2013)
 Malta (Nov 2013)
 Poland (Nov 2013)
 Seychelles (Feb 2014)
 Sint Maarten (Dutch part)
 United States (Nov 2013)

Automatic Exchange: Starts in September 2017

Cayman Islands signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information


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).

FATCA Status in the Cayman Islands
IGA in effect since 29 November 2013, Model 1

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.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

There is no deposit guarantee scheme in Cayman Islands.

Country Ceiling for Deposits

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) Foreign Currency
Aa2 (high grade) Aa3 (high grade)

Local currency (Cayman Islands dollar) deposit ceiling for Cayman Islands is set to Aa2 (high grade), foreign currency deposit ceiling is Aa3 (high grade).

Banking Supervision

Cayman Islands Monetary Authority

Banking Sector Structure

Number of Banks

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.

CategoryNumber of Banks
Category A (Banking & Trust)7
Category A (Banking)4
Category B (Banking & Trust)59
Category B (Banking)109

Table 2. Number of banks by category in Cayman Islands.