All about the Cayman Islands

The Cayman Islands were sighted by Christopher Columbus, on 10 May 1503 on his fourth and final voyage to the New World. He named the islands Las Tortugas after the numerous sea turtles there. The first recorded English visitor to the islands was Sir Francis Drake, who landed there in 1586 and named them the Cayman Islands after caiman, the Neo-Taino nations’ term for alligator.

The first recorded permanent inhabitant of the Cayman Islands, Isaac Bodden, was born on Grand Cayman around 1661. He was the grandson of the original settler named Bodden who was probably one of Oliver Cromwell‘s soldiers at the taking of Jamaica in 1655.

The Cayman Islands remained largely uninhabited until the 17th century. A variety of people settled on the islands, including pirates, refugees from the Spanish Inquisition, shipwrecked sailors, deserters from Oliver Cromwell’s army in Jamaica, and slaves. The majority of Caymanians are of African and British descent, with considerable interracial mixing.

Great Britain took formal control of the Cayman Islands, along with Jamaica, under the Treaty of Madrid in 1670. Following several unsuccessful attempts, permanent settlement of the islands began in the 1730s. The islands, along with nearby Jamaica, were captured from the Spanish Empire, then ceded England under the Treaty of Madrid (1670). They were governed as a single colony with Jamaica until 1962 when they became a separate British Overseas Territory and Jamaica became an independent Commonwealth realm.

The Cayman Islands historically have been a tax-exempt destination. On February 8th, 1794, the Caymanians rescued the crews of a group of 10 merchant ships, including the HMS Convert. The ships had struck a reef and run aground during rough seas. King George III rewarded the island with a promise never to introduce taxes as compensation for their generosity. A well known urban legend introuduces the idea that the true reason the Cayman Islands have never been taxed is because these merchant ships actually carried with them a member of the King’s own family, his son Prince William IV, however this is not true.

The Cayman Islands are located in the western Caribbean Sea and are the peaks of a massive underwater ridge, known as the Cayman Trench (or Trough), standing 8,000 feet (2,400 m) from the sea floor, which barely exceeds the surface. The islands lie in the northwest of the Caribbean Sea, south of Cuba and west of Jamaica. They are situated about 400 miles (650 km) south of Miami, 180 miles (300 km) south of Cuba, and 195 miles (315 km) northwest of Jamaica. Grand Cayman is by far the biggest, with an area of 76 square miles (197 km²). The two “Sister Islands” of Cayman Brac and Little Cayman are located about 80 miles (130 km) east of Grand Cayman and have areas of 14 square miles (36 km²) and 10 square miles (25.9 km²) respectively.

All three islands were formed by large coral heads covering submerged ice age peaks of western extensions of the Cuban Sierra Maestra range and are mostly flat. One notable exception to this is The Bluff on Cayman Brac’s eastern part, which rises to 140 feet (42.6 m) above sea level, the highest point on the island.

The Cayman Islands have more registered businesses than they have people. The latest population estimate of the Cayman Islands is about 52,000 as of 2006, representing a mix of more than 100 nationalities. Out of that number, about half are of Caymanian descent. About 60% of the population is of mixed race (mostly mixed African-European). Of the remaining 40%, about half are of European descent and half are of African descent. The islands are almost exclusively Christian, with large numbers of Presbyterians and Catholics. Caymanians enjoy the highest standard of living in the Caribbean. The vast majority of the population resides on Grand Cayman, followed by Cayman Brac and Little Cayman, respectively.

The capital of the Cayman Islands is George Town, which is located on the southwest coast of Grand Cayman.

Population of the cities (Districts)

According to the Islands’ Economics and Statistics Office (ESO) the estimated resident population is 60,456 persons, broken down as follows: George Town: 23,001 West Bay: 16,305 Bodden Town: 13,844 North Side: 2,277 East End: 2,345 Cayman Brac & Little Cayman: 3,797

With an average income of around KYD$42,000, Caymanians enjoy the highest standard of living in the Caribbean. According to the CIA World Factbook, the Cayman Islands GDP per capita is the 12th highest in the world. The islands print their own currency, the Cayman Islands Dollar (KYD), which is pegged to the U.S. dollar at a fixed rate of 1 KYD = 1.25 USD.

The government’s primary source of income is indirect taxation: there is no income tax, capital gains tax or corporation tax. An import duty of 5% to 20% is levied against goods imported into the islands. Few goods are exempt; notable examples include books, cameras and infant formula.

One of Grand Cayman‘s (GCM) main attractions is Seven Mile Beach, on which a number of the island’s hotels and resorts are located. Historical sites in GCM, such as Pedro St. James Castle in BoddenTown, also attract visitors. Tourists also visit the Sister Islands, Little Cayman and Cayman Brac

All three islands offer scuba diving, and the Caymans are home to several snorkeling locations, where tourists can swim with stingrays(including Stingray City, Grand Cayman). There are two shipwrecks off the shores of Cayman Brac, including the MV Keith Tibbetts.

Other Grand Cayman tourist attractions include the Ironshore landscape of Hell, the 23-acre (93,000 m²) marine theme park Boatswain‘s Beach, also home of the Cayman Turtle Farm, the production of gourmet sea salt, and the Mastic Trail, a hiking trail through the forests in the centre of the island. The NationalTrust for the Cayman Islands provides guided tours weekly on the Mastic Trail and other locations.

One reason for the Cayman Islands’ success as an offshore financial centre has been the concentration of top-quality service providers. These include leading global financial institutions (incl. UBS and Goldman Sachs), over 80 administrators, leading accountancy practices (incl. the Big Four auditors), and offshore law practices (incl. Maples & Calder and Ogier).

Since the introduction of the Mutual Funds Law in 1993, which has been copied by jurisdictions around the world, the Cayman Islands have grown to be the world’s leading offshore hedge fund jurisdiction. In June 2008 it passed 10,000 hedge fund registrations, and over the year ending June 2008 CIMA reported a net growth rate of 12% for hedge funds.

Taxation

There is no direct taxation imposed on residents and Cayman Islands companies. The government receives the majority of its income from indirect taxation. Duty at is levied against most imported goods, which is typically in the range of 22% to 25%. Some items are exempted like baby formula, books, cameras and certain items at a reduced rate of 5%. Duty on automobiles depends the age and value and can be up to 40% for expensive models. Financial institutions that operate in the islands are charged a flat licensing fees by the government, in addition to work permit fees on foreign labour. A 10% government tax is placed on all tourist accommodations in addition to a small fee e ach tourist pays upon entering on the island.