Mention the Cayman Islands to a non-Caymanian five years ago and they'd likely think of picturesque Caribbean beaches, a thriving financial industry, and a favourable tax neutral business environment. All of these attributes are still accurate today, but thanks to a recent tech boom, strategic government initiatives, vibrant special economic zones (SEZs), and dynamic industry bodies, Cayman is increasingly being recognised for a new sector – its growing digital economy.
This promising new business sector comes at an opportune time as the Cayman Islands, and the rest of the world, work to rebuild economies and face new realities brought on by the COVID-19 pandemic.
Technology Focused Special Economic Zone
Following the 2008 financial crisis, the Cayman Islands Government had the strategic foresight to pass the Special Economic Zones law in order to support economic diversification and to help the offshore jurisdiction deal with global economic crises, such as the COVID-19 pandemic. SEZs and creative entrepreneurs are now helping to rebuild and strengthen economies throughout the world – and the Cayman Islands, through its globally competitive, fully transparent SEZ concessions (as set out in the SEZ Law), is doing just that – by attracting knowledge-based industries, by diversifying the economy, and by serving as a platform for entrepreneurship and innovation.
Cayman Tech City, one of three Cayman Islands SEZs by Cayman Enterprise City (CEC), is now home to over 175 technology-focused companies. Together with another 75+ companies operating from within CEC’s other knowledge-focused zones, these global businesses have contributed an estimated US$500 million and counting to Cayman’s economy since its inception in 2011. Cayman’s specialised free zones offer the environment and support for knowledge-based industries – including those focused on the sciences, aviation and maritime, media and marketing, as well as commodities and derivatives trading – so that businesses can focus on innovation, growth, and profitability.
Despite the economic downturn, competitive concessions paired with world-class services, are continuing to attract foreign direct investment and provide meaningful opportunities for Caymanians within Cayman’s growing digital sector.
New Initiatives & The Entrepreneurial Mindset
The recent influx of innovative tech companies and talent has created a new energy and sense of community around Cayman’s digital economy.
First announced at the Cayman Islands Digital Economy Conference (CYDEC) on 20 June 2019, Digital Cayman was launched as a not-for-profit industry body, to further support economic diversification and provide a voice for the Cayman Islands’ digital sector. The industry-led organisation is working to cultivate Cayman’s dynamic digital ecosystem and support regulatory and legislative change so that digital innovation can thrive in the same way other industries, including tourism and the financial services, have achieved significant success within the jurisdiction.
Industry experts meet regularly for technology-focused discussions and specialised industry groups including the Blockchain Association of the Cayman Islands, and the Cayman Islands Marketing Professionals Association, are further aiding to support a favorable business environment and professionalise Cayman’s digital sector.
The jurisdiction has quickly recognised the need to support tech education and develop a workforce capable of filling, and creating, emerging technical job opportunities presented by the growing number of digital sector businesses. Organisations focused on workforce development such as the University College of the Cayman Islands, Cayman Code Academy, Code(Cayman), and CEC’s Enterprise Cayman, are supporting a number of workforce-ready and entrepreneurial initiatives. Cayman’s tech ecosystem is now delivering – financial assistance for code education, industry focused internships, a business design competition, a business incubator programme, computer donation drives, innovation tours, and so on. A plethora of engaging programming and events are now being produced in Cayman, which are helping to close the digital divide, are supporting accessible technology-driven training opportunities, and are solidifying professional networks, required to grow and sustain a vibrant digital economy.
Furthermore, policy development such as the regulatory framework for the VASP Law, will provide a legal framework to promote the use of new technology and innovative enterprise in the Cayman Islands while complying with newly adopted international standards set by the Financial Action Task Force (FATF). Newly proposed legislation will pave the way for an expansion in fintech and virtual asset service providers, such as those dealing in cryptocurrencies and non-fungible tokens (NFTs).
A Caribbean Success Story
From blockchain, to FinTech, to traditional IT, both local and foreign-owned digitally focused companies are seizing new opportunities in the Cayman Islands to build global teams and rapidly expand their businesses. Talented individuals including; the masterminds behind David Chaum’s new digital currency, Praxxis; technologists who are reimagining what a browser should be; and geneticists who have helped to implement extensive COVID-19 testing, are now a part of Cayman’s innovative fabric, which is helping to place the Cayman Islands on the map as a digital hub and platform for developing new technology.
Innovation thrives during difficult times and Cayman’s dedicated tech community is stepping up to support workforce development initiatives and the public sector, which is in turn driving progress and cultivating Cayman’s digital economy. This culture of inventiveness, matched with increasing levels of digital sector sophistication, and harmonious private-public partnerships, might just be the mechanism to help drive Cayman’s economic recovery while supporting a sustainable, and innovative future.