South Africa boasts a large economy and population but political turmoil, weakening rand and corruption have hit the economy hard and has continued to threaten the business environment. Earlier last year, South Africa entered a recession —the first since 2009. The unemployment rate has increased from 27.2% to 27.5%; an increase of 0.3 % in four months, in addition to this the rand has fallen nearly 15% this past year. The country’s sovereign debt has been downgraded to junk by all the big credit-rating agencies except Moody’s, which has hit a notch above sub-investment grade and will review it in October.
Due to various concerns over the political, economic stability and atmosphere, many South Africans are looking to move, grow, and/or establish their businesses in jurisdictions outside their own. In an uncertain world, the Cayman Islands is a safe and secure place to do business. It's stable institutions and good governance make it the ultimate jurisdiction of choice for many South African firms who seek to establish a physical presence offshore.
The temperament of a country’s political environment is a major strategic factor that contributes to the success or failure of many business operations. The political landscape has a significant effect on a business’ decision-making process and overall strategic financial management.
The Cayman Islands offers a stable political system based on a foundation of an adaptive regulatory structure which is a rare find in most nations. Entrepreneurs can take comfort in the fact that the country, as a British Overseas Territory, has strong political and economic stability, and its legal and court system is based on English Common Law. The country has its own democratically elected Parliament, which has consistently maintained responsibility for domestic affairs including fiscal matters.
Global Diversification and Increased Market Access
Setting up in the Cayman Islands opens up immense business opportunities and increased access to North America markets and the world at large. An array of convenient one-four hour direct flights to major cities in the US, Canada and across the globe will also be at your disposal. In addition to this, the quickly expanding airport of Grand Cayman is constantly launching new air routes offering further global reach.
The Cayman Islands is a tax neutral platform. There are no direct taxes (income, property, corporate, capital gains or sales) in the Cayman Islands. The absence of any direct taxes provides a tax neutral domicile, which is an added benefit to South Africans looking to move to the jurisdiction. It is important to note however, that clients are responsible for complying with their tax regimes in their home country in accordance with their respective rules. More on South Africa's tax laws in regards to working abroad can be found here. Yet another benefit of the Cayman Islands is its strong currency in comparison to the current South African rand. At the time of publication, one KYD is equivalent to seventeen ZAR.
It is said world currencies often fluctuate depending upon political or economic conditions in each country. The South African rand has not been immune to this and has recorded its fair share of unexpected and inconsistent currency fluctuations. Introduced in 1972, the Cayman Islands dollar does not fluctuate in global foreign exchange markets, but is pegged to the US dollar at a rate of 1 to 1.227. The stable Cayman Islands currency is among the world’s top 20 currencies and the 7th- highest currency in the world. The US dollar is accepted as legal currency by Cayman businesses, but any change returned from a purchase will be given back in the local KYD currency.
Easy Purchasing of Real Estate
As a foreigner, you have no restrictions on owning any property whether it be residential, land or commercial. There is no property tax, capital gains tax or inheritance tax, so the entire purchasing process is relatively straightforward and in the last two decades, real estate has shown strong positive growth, making it a good investment.
A Vibrant South African Community
The Cayman Islands is a multi-cultural country with well over 130 nationalities represented. South Africans are one of the largest expat communities on island, with the islands’ main supermarket even having a dedicated Mzansi special aisle stocked with truly South African products. Cayman has a diverse offering of sporting and recreation options, including some of South Africa’s favorites, including rugby, cricket, and even an emerging surfing community. Now that’s what we call home away from home!
To top it all, the Cayman Islands has an exceptionally strong financial services community, with some of the best service providers in the world – legal, accounting, advisory, management, administration and fiduciary services. If you’d like to explore your options and get a feel for what living and working in the Cayman Islands is like get in touch with us today. We have over 250 businesses within Cayman Enterprise City who are incredibly diverse in industry and size that we can put you in touch with as we consult with you on your needs.
If you would like to hear more about Cayman’s thriving special economic zones and discover what our team can do to help your business grow please don’t hesitate to get in touch. Cayman Enterprise City – it’s quick, efficient and cost effective, relocating to the Caribbean is easier than you think.