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.
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.
1 KYD = 1.25 USD
|Nominal GDP (2015)||Real GDP Growth (2014)|
|2.8 bln KYD (+0.03%)||2.4 % (2013: 1.5 %)|
According to Economics and Statistics Office, nominal GDP of Cayman Islands in 2015 was 2.8 bln KYD.
Cayman Islands underperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.0% over the past 3 years (2011 - 2014). In 2014 real GDP growth was 2.4% which was above the Euro Area average (0.9%) and above the European Union average (1.3%).
Chart 1. Real GDP Growth in Cayman Islands. Source: Economics and Statistics Office.
|CPI, Year Average (2016)|
|-0.6 % (2015: -2.4 %)|
According to Economics and Statistics Office, inflation rate in Cayman Islands in 2016 expressed as annual percentages of average consumer prices was -0.6% which was below the Euro Area average (0.2%) and below the European Union average (0.3%).
Chart 2. Inflation Rate in Cayman Islands. Source: Economics and Statistics Office.
|Unemployment Rate (2015)|
|4.2 % (2014: 4.7 %)|
|-||Aa3 (high grade), outlook stable|
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 1 January 2013 the date of coming into force is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
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.
Cayman Islands signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 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 1 January 2013 of signing the agreement is given in brackets):
Cayman Islands signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
the Cayman Islands has signed bilateral agreements with 49 jurisdictions to automatically receive information:
the Cayman Islands has not singed any bilateral agreements to automatically send 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.
|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:
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)||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).
Cayman Islands Monetary Authority
|Number of Banks|
|Consolidated Assets (2016)|
|1 035.66 bln USD (-12.21%)|
Currently there are 158 credit institutions operating in Cayman Islands.
In 2016 consolidated banking assets in the Cayman Islands were 1 035.66 bln USD. The consolidated banking assets' evolution is shown at Chart 3 below.
Chart 3. Consolidated banking assets 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)||51|
|Category B (Banking)||96|