By Premier Hon. Alden McLaughlin, MBE, JP, MLA
1 p.m., Wednesday, 6 April, 2016 Ritz-Carlton
Good afternoon,
For those of you experiencing your first time in the Cayman Islands I welcome you. For those of you who were here with us last year welcome back. We are certainly pleased that you are all here and I trust that you will enjoy our unique Caymanian hospitality and our beautiful sunsets and beaches while you are here.
I had the privilege of meeting Chairman Sinan and Vice Chair Matt in 2014 when I was invited by the IMA and Charlie Kirkconnell, of Cayman Enterprise City, to attend and participate in the IMPACT14 conference in Las Vegas. The scale of that conference and the energy it generated was certainly impressive. It was also a very good venue for Charlie and me to tell the Cayman story and explain what a fantastic place the Cayman Islands is to do business and indeed to live.
I have to add that a highlight of that conference for me was learning that the IMA and Cayman Enterprise City were in discussions regarding hosting an annual IMA conference in the Cayman Islands. True to their word in April 2015 the IMA and CEC brought IMA leaders and members to the Cayman Islands for a very successful familiarisation visit. This paved the way for this impressive IMPACT16 Conference here today. And I gather plans are already afoot for an even larger conference next year.
For those of you who are new to Cayman, I don’t think it will take long for you to figure out why so many businesses choose to set up in Cayman.
On one hand, we’re everything you think of when you conjure an image of a tropical paradise – year-round sunshine, friendly people, sugar-white beaches, and hammocks gently blowing in the breeze, cool island drinks and a generally slower pace to life.
But there is also a business side to the Cayman Islands. We are after all a world-class financial centre that offers an energetic and dynamic environment in which to do business. This coupled with a tourism product that is second-to-none has helped fuel good economic growth and confidence in Cayman. We also boast a stable government, superb infrastructure and an educated and motivated workforce, including quality legal and accounting firms.
Our diverse population of about 60,000 people, hailing from more than 130 countries, along with the 2 million plus visitors who arrive on our shores annually and thousands of businesses that operate from here all help to keep Cayman flourishing. And so we are able to mesh the world of the idyllic with the real working world of high finance, cruise and stayover tourism and technology.
But I assure you, it didn’t happen by accident or overnight. Hard work and a dogged determination coupled with innovation and an entrepreneurial spirit over the past 40 years have brought the Cayman Islands to where we are today as a world class financial centre and tourist destination.
Indeed our financial services business has been performing well and tourist arrivals for cruise and stayover have been breaking records. And Cayman tourism is set to grow even more with the addition of several new properties over the next few years, from the Kimpton Seafire hotel, which will open in November, to the development of a new Arnold Palmer lodge and golf course, which is expected to break ground later this year. There are also other exciting plans for other hotel and condo properties along the Seven Mile Beach stretch as well as in Bodden Town.
As a Government we are also working hard to diversify our economy. To that end we have moved to modernise our copyright and intellectual property legislation to ensure that Cayman can attract new businesses, particularly those in tech.
Government’s partnership with CEC, our first Special Economic Zone is important in helping businesses to move or set up in Cayman – helping to create jobs and knowledge transfer to Caymanians. And I have to say that the growing relationship between the IMA and CEC, and by extension to the Cayman Islands, is certainly welcome. And I am sure it will be a mutually beneficial one in the coming years.
And this Government is doing its part to support business and residents with necessary infrastructure projects, two of which include the already started airport renovation and expansion project as well as major improvements to our road networks. And these are being done from cash and with no new borrowing.
Certainly we understand that governments do not create growth or wealth, but they can and should create the conditions for the business sector to do so. This Government’s record in working with business to promote growth is one we can be rightly proud of. By the end of 2016, if current forecasts hold true, under this Government the economy will have grown annually by an average of about 2 per cent during the three years following our election. Contrast this to an average increase of 0.81 per cent in GDP for the preceding three years. Government finances have also been stabilized under our watch and we continue to operate and produce surplus budgets year on year. Because of this we have not just been able to improve our key infrastructure as mentioned earlier, but we have also been able to reduce taxes over the past two years as well as pay down debt. Indeed we have put some $70 million dollars back into the pockets of families and businesses with our tax reductions. And our debt to GDP is relatively low and trending down.
Moody’s recently again confirmed Cayman’s Aa3 rating and stable outlook. This is superb for a country of our size and is an indication of our economic strength. Indeed, the World Bank governance indicators for Cayman are the highest in the region and among the highest of all sovereigns rated by Moody’s, including some highly developed countries.
We also have a strong stable of professional service providers that are more than capable and willing to assist in setting up and managing legal structures. As a United Kingdom Overseas Territory, Cayman’s Laws are based on English law and are a combination of common law and modern statutes. These include stringent laws around Anti-Money Laundering and tax evasion.
Indeed despite the picture that some may paint, Cayman has decades of engagement with international initiatives around Anti-Money Laundering and tax evasion, and we have in place mechanisms for exchanges of information on tax and beneficial ownership information. Mechanisms such as tax information exchange agreements, the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the double tax arrangement with the UK allow for the sharing of information with more than 90 jurisdictions.
Additionally, Cayman automatically shares information with the US and UK, for FATCA purposes and is committed to the OECD’s Common Reporting Standard along with 95 other jurisdictions, including the majority of G20 countries. And we consistently seek to enhance our regulatory framework in order to more effectively collaborate globally with law enforcement and tax authorities in the fight against serious crime.
I am sure that you may have heard that credible international organizations such as the Financial Action Task Force and Organization for Economic Cooperation and Development recognize the leading role that Cayman plays in the prevention of anti-money laundering, tax evasion and serious crime. Criminals looking to set up illicit shell companies that serve to hide ill-begotten gains or usurp the laws of another country will not readily find a home here.
Currently the news media is full of stories with regard to the “Panama Papers” leak and there are some in the media, and indeed some misinformed politicians in the United Kingdom who try to lump the Cayman Islands in to the so-called tax haven bucket and ignore the words of Prime Minister David Cameron who was quoted as saying “I do not think it is fair any longer to refer to any of the Overseas Territories or Crown Dependencies as tax havens. They have taken action to make sure that they have fair and open tax systems”. Needless to say, we agree with him particularly as regards the Cayman Islands. Our point all along has been that while the world’s attention has been on places like the Cayman Islands, which does uphold necessary international standards, and which does collaborate with all countries that adhere to global standards for the sharing of information, insufficient attention and effort has been focused on where the real problems are; those places that do not adhere to the strict standards that we follow. Criminals are much less likely to operate in well-regulated jurisdictions, like the Cayman Islands, where the spotlight is brightest and the attention is greatest. They will simply migrate to where there is less sunshine.
In February 2014 I was invited to Chatham House in London to give a key note address at a conference with the theme of combatting global corruption. I said “I will be forthright. No stronger interface exists between corruption and international financial centres than exists between corruption and every single country in this world. Finance is both global and digital. Therefore, corruption is global and digital; it does not solely reside in any particular geographic region or in a particular grouping of countries or peoples”.
I also said “This truth is so simple, but it is inconvenient to acknowledge it – inconvenient for political candidates who are looking for a scapegoat for mismanaged public finances and inconvenient for some of the news media that operate more as entertainers than purveyors of the truth. It is inconvenient for many Non-Governmental Organisations – although I do believe many of them have the public interest at heart, at times their passion overrides their analysis”.
I mention this because there will be some of you in this room considering doing business in Cayman and will read and see what some in the press are saying. It is important to me, and indeed my Government, that you know the full truth. The Cayman Islands is not Panama and our anti-money laundering regime has been in effect for over 15 years. We continue to enhance it. Indeed it surpasses what can be found in onshore jurisdictions like the United Kingdom and the United States.
So in summary, we are not just a wonderful place to visit and live but also a good place for business and we are a jurisdiction that meets its international obligations in the fight against serious crime.
In closing I once again thank Sinan and Matt for bringing us the full impact of IMPACT16 this year. I have heard first-hand how much effort has gone into making this event a reality and that you have worked tirelessly for months promoting Cayman and generating interest internationally for the event and Cayman as the ideal jurisdiction. For that I am grateful. I am also grateful to Charlie and the team at CEC for your hard work.
‘Success’ like ‘Hard Work’ is to be celebrated and recognised. Few understood this better than US President Abraham Lincoln. There is a story that when critics of Gen Ulysses S. Grant – one of Lincoln’s most successful, hardworking, and trusted generals – complained to the President that Gen. Grant was seen frequently imbibing whisky in his tent that Lincoln responded – “I wish you would tell me the brand of whisky – I would send a barrel to all of my other generals.”
Sinan, Matt, and Charlie – I cannot promise you each a barrel of the finest whisky but I look forward to joining you in a drink when we meet again tonight to toast your hard work, and to toast the IMA and CEC for hosting this conference in Cayman. I look forward to the one next year.
I trust you will enjoy your stay in the Cayman Islands and take your stories of your amazing time in paradise back home with you when you go. As you will see from IMPACT16, Cayman is an outstanding place to hold strategic retreats or board meetings. And it’s an excellent place to call home.
Enjoy the rest of the day and I look forward to seeing you again and speaking with you one-on-one tonight.
Thank you and enjoy.
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