avoid tax on income. US citizens are liable to
a chequing account, since bills may be
be taxed on worldwide income, irrespective
paid online. In this instance, customers are
Working in Cayman can be particularly rewarding as earnings and any gains from investments are tax-free. Nevertheless, as the Cayman Islands are a tax-neutral jurisdiction, it is strongly recommended that all new residents looking for employment here take the following steps:
of where that income is physically earned,
granted savings accounts in either US$ or
although you may be eligible for a foreign
CI$. (Note: banks in Cayman are strictly
earned income exclusion, which is adjusted
regulated by the Government-run Cayman
each year based on the inflation rate.
Islands Monetary Authority (CIMA), which
Canadian citizens have to prove that they
has the regulatory and oversight functions
have severed ties with Canada to avoid
of a central bank. There is no equivalent
paying tax.
in Cayman to the US Federal Deposit
1) Seek tax advice in your home country.
2) As soon as is practical after arrival in the
Insurance, which means that deposits are
The tax authorities in Canada, the UK and
Cayman Islands, a local bank account
not protected if a bank should be declared
the US treat income differently when their
should be established. This will enable you
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I N V E S T I N G I N C AY M A N
3
bankrupt). 3) Consider
the
establishment
of
an
residents are physically working outside
to have a debit card and do online banking.
of the country. All newcomers to Cayman
Local ATMs accept both local and foreign
investment account. This will enable new
should determine if it is advantageous
debit and credit cards. Regarding chequing
residents to take advantage of some of
to transfer savings and investments to
accounts, most local banks impose both
the other services that banks offer, such
Cayman or keep them at home. It is also
monthly fees and transaction fees on
as investment advice, brokerage services
very important to determine how long you
chequing accounts unless fairly significant
and, for those with significant assets,
need to be a non-resident before securing
average balances are maintained. Certain
discretionary investment management.
tax-free benefits, if it is possible at all. Tax
banks for example, point out to new
4) Arrive prepared to meet local requirements
legislation is continually changing, so it is
customers that the bank maintains the
for establishing banking and investment
imperative to have the latest information
payment details of several hundred local
relationships. Local due diligence calls
before making decisions on investing. For
merchants and service providers. This,
for having readily available (original)
example, in the UK an individual has to be a
together with easily accessible online
documents that confirm the personal
non-resident for one full tax year in order to
banking, can mitigate the need for having
identity and other particulars of an applicant. The requirements vary with each institution, but generally include two forms of identification, confirmation of residential address, a bank reference, professional reference (both addressed to the bank in Cayman) and evidence of the source of funds. For a full and detailed list of requirements see the Money and Banking section of the Settling In chapter. 5) If planning to return to a country that is not US$ denominated, consider converting CI$ or US$ denominated earnings to the home country currency on a regular basis. If all of your savings are in CI$ and you only convert it upon returning to the home country, it is possible that exchange rates could move adversely and negatively impact the value of your savings once converted into your home currency. 6) Factor into investment planning an eventual return to your home country. At that time, it’s not advisable to liquidate all investments held locally and repatriate the funds. To make the appropriate decision at that time, it is very important to be fully aware of your individual tax situation and what you
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