Business in the Cayman Islands 2011

Business in the

cayman islands

3 Introduction with Premier Bush 10 I nside Perspective with Ogier 12 M arketTalk with KRyS Global

Photograph Camana Bay by Jim Gates

SPECIAL REPORT 2011

www.dci.gov.ky

There is Zero Taxation as the government does not impose personal or corporation income taxes and there are no taxes on profits and gains from investments. There are no property taxes or controls on foreign ownership of property either.

Ask any of our funds, trusts, captive insurance companies or international banks why they chose to invest in the Cayman Islands and the response will be unanimous. They set up business in our jurisdiction because it offers many Competitive Advantages that make it an attractive place to do business.

Our Workforce is highly educated and we enjoy one of the Highest Standards of Living in the world.

With Miami only one hour away by plane and eight major international airlines making more than 55 weekly flights into Cayman direct from the United States, Canada and England we’re Easily Accessible too.

The Department of Commerce and Investment provides valuable investment climate

Cayman offers a Supportive data and business opportunity information and guidance on regulatory procedures for setting up a business. Call us today. We’re here to help you.

Business Environment backed by a stable economic and political climate, the absence of exchange controls, modern infrastructure and modern communication systems that put us on par with the best in the world.

1st Floor, Cayman Corporate Centre | P.O. Box 10087 | Grand Cayman, Ky1-1001, Cayman Islands | t: (345) 945-0943 f: (345) 945-0941 Visit us online at: www.dci.gov.ky or email: investment@dci.gov.ky

Introduction with Premier Bush Hon McKeeva Bush OBE, JP Premier and Minister of Finance, Cayman Islands

The Cayman Islands has maintained its status as a leading financial centre for the last 20 years. This report will focus on the hugely successful diversification plan Cayman Islands Premier McKeeva Bush, his government, and the private sector have undertaken to make the island a premier business destination for 2011 and beyond.

Global Investment I Limited is pleased to present ‘Business in the Cayman Islands 2011.’ The following interview will provide more insight into current government initiatives and activities under way. It is our honour to present Cayman Islands Premier and Minister of Finance McKeeva Bush, OBE, JP.

that English is our official language and that we operate in a similar time zone to New York also helps.

What is government doing to attract more businesses to establish operations in the Cayman Islands?

Given the global impact of the recent recession, my administration realized very

In your opinion, why is Cayman an attractive place to invest and do business? What are the competitive advantages compared to other regional and international financial jurisdictions?

It’s really a variety of factors. First and foremost, my administration prides itself on having a can-do attitude and I think our pro-business environment is often a deciding factor. I also believe our stable economic and political climate, sound legal framework, absence of exchange controls, modern infrastructure and the absence of any direct taxation all work to our advantage.

Our accessibility via direct flights from major US, UK and Canadian gateways is something else we have in our favour.

Miami is an hour away by plane and it’s therefore quite convenient to plan trips or meetings here when necessary. The fact

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early into our tenure that simply maintaining the status quo of “business as usual” would not be prudent policy. Subsequently, when the Ministry of Finance, Tourism and Development was formed following the last election, it brought together talent, resources and policy initiatives in a way that

Editor: Joseph Bove Project Manager: Kuljit Kaler Design: The Arland Group

seeks to create investment opportunities.

Key to these efforts is the work of the Department of Commerce and Investment (DCI), which stimulates and facilitates long-term, inward and local investment by providing technical assistance to businesses, and linking investors with potential customers, suppliers and other business partners.

We also are aggressively pursuing new industry segments that would complement our existing financial services and tourism base, and yet also provide greater diversification for our economy. As you know, it is only by growing the range of our product and service offerings that we will achieve greater revenue streams that can be used to fuel further growth.

The immediate result of these efforts is the confirmation of two large-scale projects that will bring substantial new business to the Cayman Islands economy: • The Narayana Cayman Medical Centre will eventually become a 2,000-bed medical facility to serve domestic and international patients, spearheaded by renowned Indian heart surgeon Dr Devi Shetty. It will represent Cayman’s foray into medical tourism.

• Cayman Enterprise City will be a free-trade zone for international companies looking to take advantage of investment opportunities on our shores, focused on the areas of technology, research and academia, commerce and trade. With an investment valued at over US$500 million over the next eight years, and the potential for over 5,000 highly skilled jobs, the benefits of this development extend beyond

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The views expressed in Business in the Cayman Islands Special Report 2011 are not necessarily those shared with the publisher, Global Investment I Limited. Wishing to reflect the true nature of the Cayman Islands , the editor has included articles from a number of sources, and the views expressed are those of the individual contributors.

No responsibility or liability is accepted by Global Investment I Limited for any loss to any person, legal or physical, as a result of any statement, fact or figure contained in Business in the Cayman Islands Special Report 2011. This publication is not a substitute for advice on a specific transaction.

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Introduction with Premier Bush economic impact and into the development of our human capital.

As the implementation phase of these two projects draw closer, DCI will incorporate more of the project benefits and business opportunities that may arise into their marketing efforts.

What new incentives are being considered and what is being done to make it easier to do business and invest in Cayman?

Incentives are usually considered on a case by case basis and can vary widely depending on the project.

Successful measures that we have employed in the past to attract new investment include offering reductions, waivers and/or deferral of licensing fees where the benefits of the business outweigh the costs. In other cases, things like efficiency improvements to the process of obtaining residency certificates and visas in order to facilitate and expedite relocations worked well, as has expediting the turn-around time for approval on work permits.

What type of investments and industries is your government looking to attract to Cayman over the next 5 years? How do you look to attract these investors, industries and entities? What challenges do you face in achieving your goals?

The plans for Cayman Enterprise City are quite extensive and if things go according to plan (and I am confident they shall), the existence of that special economic zone will attract companies and/or organizations within the media, internet, biotech, global commodities and academia fields. On our part, the government will do all that it can to ensure that the business environment remains competitive and is

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conducive to support growth.

Lead generation will be an on-going process and investor targeting will be a collaborative venture between the public and private sector.

I have always been an avid proponent of the fact that we cannot do this alone.

It is for this reason that we have invested much time and resources to build and maintain strong relationships with key stakeholders, as these partnerships often prove to be the most mutually beneficial when collaboration is heightened. Currently, we are looking at ways to work more closely with the private sector in terms of aligning our key messages and marketing efforts, to assure domestic and international audiences that there is consistency and synergy in our communication.

I think the major challenge we face generally is that of making sure the growth is phased properly. We are a small island

nation with a finite set of physical resources and that necessitates taking great care to introduce change gradually. Above all else, stability must be maintained so that all future development is sustainable.

What message would you like to send out about Cayman and the investment and commerce opportunities it presents?

Government and the private sector are working more closely together than ever, to continue expanding and improving our business climate. Cayman’s service offerings are advanced, our political and economic climates are stable, and our business legislation is solid, as verified by supranational organisations.

In short, the doors of the Cayman Islands are open, and business will find a very welcoming environment in which to thrive. a

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Business in the Cayman Islands

Always Improving Cayman Islands Monetary Authority endures a busy 2011 but keeps up through improved efficiencies.

As in all leading countries the largest contributor to a healthy financial services sector in the Cayman Islands comes down to the regulator. Although this has been a conten-

legislation possible, which is why Cayman is an effective jurisdiction. Unfortunately for the competition of this financial centre they will have a hard time beating the public and private sector partnership that seems to blossom on this island.

As of October 4th, 2010 CIMA introduced a new online platform for the fund authorisation process. CIMAConnect was born out of efficiency and careful planning. Service providers to funds are now able to apply for access to the system, and once they are authorised users, can submit requests for the registration or licensing of new funds online from anywhere in the world. Another important feature of CIMAConnect is being able to track the progress of submissions and receive instant notifications when applications are approved. For a Regulator that is already known for speed and efficiency this new online platform will only be able to bring in a higher rate of business and investment into the island at a time when more and more funds are coming from destinations like Asia and South America.

The signing of a Memorandum of Understanding establishing bilateral ties between the Cayman Islands Monetary Authority and the Dubai Financial Services Authority has been a major accomplishment in 2011.

CIMA Managing Director Cindy Scotland signed the Memorandum of Understanding with the Dubai Financial Services Authority, the independent regulator of all financial and ancillary services conducted through the Dubai International Financial Centre. This agreement will govern cooperation and the exchange of information between the organisations, something that had already been taking place on an informal basis. Of course the real hope is that Cayman will continue to see more business coming from the Gulf Countries, especially with the UAE where there has already been an exchange of ideas for some time now. This also proves that while Premier Bush does state the need for international cooperation quite often, CIMA, and the private sector also embrace this effort.

As legislation on the proposed Alternative Investment Fund Managers Directive (AIFM Directive) was finally signed off on by the European Union in January 2011 the Cayman Islands and other jurisdictions now have the ability to know what lies in store for them in 2018 and the procedures they will have to abide by.

That being said CIMA has been an instrumental voice in this process and will continue to be a leader throughout the development of the implementation strategies. The knowledge gained and shared by CIMA with almost 20 years of experience in regulating the world’s leading funds, is no doubt a great resource. The ability of Cayman to stay ahead of the competition and not rest on already good laurels will be a hallmark of the jurisdictions undertakings over 2011 and in the future. a

tious subject in some countries, the Cayman private sector has always been more of a partner with the Cayman Islands Monetary Authority (CIMA) rather than an antagonist. Although Cayman is ranked number 2 amongst Captive Insurance centres worldwide, the government introduced the Insurance Law of 2010 legislation which should only further strengthen the islands domestic and international insurance industries. While New York and London based firms applaud CIMA’s speed in new fund authorisations, the Authority launches CIMAConnect which allows service providers to submit and track the process through a secured online platform. Surely there are no short days at this Authority. Cayman has signed 23 Tax Information Exchange Agreements, three are currently being negotiated and six are in the initial stages and a further 21 bi- and multi-lateral agreements are in place for regulatory cooperation and information exchange. 2011 will be a significant year in the further development of the financial services sector but also the government and CIMA’s vision of extensive international cooperation and partnerships.

The key reason for the Insurance Law of 2010, which will be implemented in June 2011, was that the current Insurance Law in the Cayman Islands applies uniform rules to all insurers regardless of risk. So a Captive, despite being a form of self-insurance, needs the same Camana Bay capital, recording and disclosure, and risk management as a local provider of car, health, and life insurance. Although this worked for a period of time, it has become archaic and detrimental to growing other sectors within the insurance field. For example the reinsurance industry is now in a strong position to grow as it provides existing reinsurers and possible capital providers the opportunity to see strong regulation and backing within the government, which undoubtedly creates a sense of safety and could create a more active market. While the reinsurance industry remains a competitive field, more and more large companies are looking at jurisdictions that provide strong legislation, affordable lifestyle, and access to major markets. Some of the well-known jurisdictions dominating this field have incurred fairly negative rhetoric around work permits costs as well as housing. The major effect on the Captive market will be the introduction of a new class of licenses based on a measurement of their risk which will allow companies not very familiar with CIMA’s operating policy to better understand their requirements based on whether they are classified as A, B (I), B (II), or B (III) license. CIMA created a working group in 2006 along with insurance sector professionals in order to create the most effective

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Business in the Cayman Islands

Leading Jurisdiction for Captives Monique MacDonald, Chairperson and Clayton Price, Vice Chairman of Insurance Managers Association of Cayman speak about the opportunities that Cayman presents for Captives.

Cayman’s experience with various types of captive and alternative risk structures has made us one of the top captive domiciles in the world. Cayman licensed its first captive in the late 1970s and since then has maintained its position as the 2nd largest captive domicile. We have done so through up-to-date, sensible regulation facilitated through a mutually respectful relationship between the industry and the insurance regulators, adherence to international standards and attention to quality. Indeed, the Cayman Islands have set a gold standard for captive regulation and management and our popularity is due to a flight to quality.

The Cayman Islands is recognized as being politically & economically stable, tax neutral with a strong judiciary based on English Common Law. Cayman is the world’s second largest captive domicile based on the number of licensed captives, providing solid infrastructure, technology, top quality service providers including captive managers, auditors, bankers & investment advisors and lawyers. The regulatory environment is one with a framework that recognizes the need for sound regulation predicated on a risk based supervisory approach. IMAC, along with other interested associations, has enjoyed the pleasure of working closely with the Cayman Islands Government and the Cayman Islands Monetary Authority in bringing into effect the new Insurance Law of 2010 as well as the opportu­nity to provide meaningful consultation on the forthcoming regu­lations. This spirit of cooperation between all of the captive insurance company stakeholders along with the IMAC Forum without question makes the Cayman Islands the premier captive domicile.

Monique MacDonald, IMAC Chairperson

Benefits of Cayman One of the main factors is the local availability of experienced insurance managers, lawyers, bankers and accountants; after all we have been managing captives for over 30 years. This wealth of knowledge gives captive directors/owners a leg-up over their counterparts in other newer domiciles. Other benefits include: a professional regulatory environment including the ability to personally meet with the regulators; less stringent investment

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restrictions; the ability to write third-party business; world standard anti-money laundering laws; absence of exchange controls, and the opportunity to transact business in any major currency.

While healthcare captives represent the largest portion of our captives, workers compensation and property are the second and third largest sectors respectively. Cayman is also one of the leading jurisdictions for the issuance of Insurance Linked Securities in the form of Catastrophe Bonds from Special Purpose Vehicles (“SPV”).

These structures are created for a special defined purpose, which once fulfilled/ expired results in the SPV being dissolved. These entities tend to have a limited life of approximately one to four years and often provide coverage for a multitude of locations and risk types e.g. US Hurricanes, California Earthquake, Japanese Earthquake, California Wildfire and/or European Wind Storms.

IMAC’s Focus for 2011 IMAC’s main focus in 2011 is the growth of the industry and an expanded marketing program. The marketing committee is currently working with our recently appointed local Cayman marketing consultancy firm to update/improve our website and quarterly newsletter, and dissemination of industry updates. Our Research & Development Committee has been working on a num­ber of initiatives including: production of a comprehensive Domicile comparison chart that has been posted on IMAC’s website www.imac.ky. They have also been working with the IMAC Executive and local Cayman attorneys in reviewing other domiciles cell legislation with a view to proposing some form of registered or incorporated cell provisions in current SPC legislation.

As for the new Insurance Law, it will include a provision for a new class of license for Reinsurers and we’re excited about the opportunities that this may generate for the Island and our industry. As for the effect of the Law on captives, only those companies writing a substantial portion of third party business will be affected in terms of solvency requirements. Overall, the changes are simply meant to update the Law and there should be no significant impact on the majority of captive insurers.

Impact of Global Financial Crisis on Cayman Captive Industry While Cayman saw a slowdown of captive formations, as did the many other jurisdictions, overall the premiums written and assets held by our licensed captives increased. In addition, Cayman

Business in the Cayman Islands did not experience any bank failures and actually the majority of banks with a physical presence in Cayman experienced an inward flight to capital with a flow of funds into the Cayman Banks. Taking into consideration some captive parents sought to either liquidate or in cases where they owned more than one captive to amalgamate their captive subsidiaries, there were 32 new incorporations in Cayman in 2010. Therefore the net increase of 3 is not indicative of Cayman’s success experienced in 2010. During the economic downturn, captives were also able to assist their parent organizations with the declaration of dividends from strong surpluses that had built up in the captives balance sheet prior to 2010. As of yearend 2010, an increase in feasibility studies had materialized and now the benefits of those studies are taking hold with new formations resulting and the first trimester of 2011 is off to a good start.

The hedge fund sector appears to also be mirroring the direction of captives as the total number of funds domiciled in Cayman has stabilized and are in fact now showing signs of growth.

moderate rate more and more non healthcare related captives are also seeking to domicile in Cayman. With the catastrophic events that have occurred in 2011, pressure to increase rates may possibly occur which will likely bring an accelerated interest in establishing a captive by new entrants, especially by mid-sized entities seeking to participate in a group captives as a solution to stabilize their insurance costs. On the topic of Solvency II, Cayman has taken a pragmatic approach to ensure that the captive market is regulated in a sensible manner recognizing the inherent risks of a captive versus an open market commercial insurer are not the same. On a worldwide basis and specifically in the United States where it’s now easier to count the states that have not enacted captive legislation versus those that have, (quite a difference from a decade ago when one state dominated) the near term may impact service providers attempting to provide service on a local basis. The simple fact is the captive market is one of specialists and there is a benefit to captive owners by domiciling where a complement of knowledgeable service providers are available within the jurisdiction. Regulatory pressures brought about by Solvency II in Europe and the Dodd Frank Act in the US, will likely have an impact. However Cayman’s continued quest to ratify bi-lateral Tax Information Exchange Agreements (TIEAs), now standing at 23, will serve Cayman well. Cayman is also maintaining its status on the OECD white list and has received favourable reviews by the OECD peer review group. These factors should combine into a positive recipe for Cayman’s continued success.

Moving Forward The on-going challenge Cayman faces is noise from the few politicians who attempt to make fodder by perpetuating misperceptions of the jurisdiction. The Cayman Islands truly is a “Complete Financial Services Centre” boasting first class management companies, auditors, lawyers bankers and investment advisors along with a sensible regulatory regime. In the latter part of 2010, the Cayman Islands Legislature passed the new Insurance Law and the supporting regulations are anticipated to come into effect by the third quarter 2011. The new Law has two new Classes, one to specifically recognize Special Purpose Vehicles which for instance are used for Catastrophe Bonds will be Class C companies. Another new class is specifically for Commercial Reinsurers to be designated as Class D companies. The new Law also breaks Class B, which applies to captives, into three sections in order to address solvency levels depending on the level of risk resulting from unrelated open market business.

The Cayman Island’s has a robust business infrastructure, proximity to the United States including an easy air link to the UK and best in class service providers. These attributes coupled with the quality of life makes the Cayman Islands a desirable place to live and do business due to its availability of modern residences without restrictions on property ownership, superb restaurants and ample outdoor sports & recreational activities. Whether one enjoys boating, scuba diving or snorkelling, playing tennis, golf or simply relaxing on Seven Mile Beach, there are many opportunities to enjoy what Cayman has to offer for the employees of Class D companies who seek to incorporate in the Cayman Islands.

Cayman Captive Conference 2011 The 2010 Insurance Managers Association of Cayman,”IMAC” Forum was an overwhelming success with over 1040 registrants attending. Considering the previous high-water attendee mark stood at 867, the 2010 attendance exceeded our expectations. The IMAC Forum Committee is working diligently to select the panels of speaking topics and have over 100 topics that have been submitted from which to choose. Some of the potential topics include: Exposures Presented by Electronic Records, Impact of Accountable Care Organizations, Leveraging Technology to Reduce Risk, Mergers & Acquisitions impact on a Captive, Wealth Transfer, Group Captives, Cyber Liability Risks in a Captive, Property Program Designs & Supply Chain Impact. Additional sponsors have also expressed interest which is a tribute to the success that the IMAC Forum has enjoyed. This year’s event will be held Tuesday November 29 through Thursday December 1 starting with tutorial sessions scheduled on Tuesday followed by several tracks of the selected panels including industry leaders to speak on Wednesday and Thursday. This fabulous event will be held at the world class Ritz Carlton Hotel where a preferred base rate for a garden room of US $269 is available to IMAC member attendees and a range of social events are also scheduled for the evenings including one at Camana Bay and the final night beach party at the Ritz Carlton. Please visit www.caymancaptive.ky for further details. a

Trends for 2011/2012 Healthcare captives will continue to be what differentiates Cayman as the leading domicile for that industry sector. While the healthcare sector captive is anticipated to continue to grow at a

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Business in the Cayman Islands

A Key Contributor The Caledonian Group plans for the future after 40 years of excellence.

The evolution of a healthy banking and financial services sector in the Cayman Islands has not been without key contributions from a select group of entities. Of course sound regulation has come from the Cayman Islands Monetary Authority but private institutions like The Caledonian Group have played a key role in placing Cayman as the 5th largest financial centre in the world. Established in 1970 The Caledonian Group offers a comprehensive range of financial solutions to individual and corporate clients, including administrative services for all types of offshore companies, banks, trusts, insurance companies, funds, and investors. The group also offers global custodial services, worldwide correspondent banking services and investment services making it one of the largest and most successful private entities in Cayman over the last 40 years. Caledonian has a significant onshore presence in London and New York, but still counts on locations like The Isle of Man and British Virgin Islands to Caledonian House drive business. Four decades after the company was founded, Caledonian remains positioned to thrive and continues to contribute to the economic growth and diversification of the Cayman Islands and the markets they serve.

After meeting growth targets in 2010 Caledonian plans on increasing offerings in the fund administration and banking service lines to grow throughout 2011/2012. This year Caledonian Global Funds Services launched an IUF product for start-up funds and has formalised its distressed fund consultation services with the launch of the Caledonian Distressed Fund Advisory Group. Furthermore Caledonian Bank Limited will add several new services in 2012, the first being trade finance. Also in 2011 Caledonian added a new company directive and management reporting system that is being used to ensure continuous success and enhanced productivity and performance across their global offices. The investment in technology allowed Caledonian to expand their customer base across the Americas, Europe, and the Pacific Rim and will be a key to driving business for years to come. The fact the Cayman Islands has been lauded by the IMF in recent years for its strong adherence to international regulatory standards such as the Basel Banking Supervision Standards and IOSCO standards for the investment sector helps Caledonian facilitate and expand business globally and to achieve growth targets.

Although the fund industry has been affected by the global recession, service providers are now seeing growing interest and formations of new funds in Cayman. At the end of September 2010, 9,594 funds were authorised by CIMA, down from 9,838 a year earlier, but the regulator’s statistics show that the sector has been growing again since the first quarter of last year. With increased

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regulation and compliance, administrators like Caledonian Global Fund Services are well placed to shoulder much of this burden, as they are more in tune with the regulatory and corporate requirements of the jurisdiction. From the time that William S. Walker, founder of Caledonian Group, helped the Cayman government write much of the country’s financial services legislation some 50 years ago, the company continues to play a key role in advising and working with CIMA in order to advance and not hinder the Cayman economy and its main contributor the financial services sector. The islands have stood the test of time to become one of the most flexible, efficient and experienced hedge fund domiciles and service jurisdictions. With the recent finalisation of the AIFM Directive in Europe fund administrators in Cayman will sleep well at night knowing the outcome is not what was once reported for the jurisdiction and that CIMA currently meets much of the intended criteria. In fact CIMA has been invited to be an advisor, along with other leading jurisdictions, on the EU implementation strategy.

The banking sector in Cayman continues to thrive and maintain dominance amongst its international colleagues.

Caledonian Bank Limited continues to see strong demand for its core services like international payment, treasury, custody, agent bank, and credit services. The bank has been in business for over 20 years and maintains License “A” status in the Cayman Islands. This status allows Caledonian Bank Limited to operate domestically and off-shore. One of the few jurisdictions with no bank failures throughout the economic slowdown Cayman’s efforts in adhering to AML and Basel requirements have only increased the jurisdictions attractiveness. For entities like Caledonian Bank Limited that have significant international operations, this only aids the marketing efforts in the America’s, Europe and Asia. This coupled with the burdensome regulation and policies in certain countries have left the jurisdiction and its leading knowledge experts in high demand.

As the Cayman Islands continues to be known as a highly regulated financial centre that meets the highest of international standards, Caledonian strongly believes the strength lies in the jurisdictions ability to recruit the best financial services professionals globally. This professional infrastructure will enable Cayman, and companies like The Caledonian Group to maintain first class services to clients no matter their personal location. Caledonians technology platform coupled with staff recognised as among the best professionals in the industry, mean the company is willing, ready, and capable of exceeding client expectations in the delivery of premium financial services. a

Business in the Cayman Islands

Inside Perspective: Ogier provides insight on the current state of the fund industry.

Overall U.S. presence in the funds industry has declined from 82% to 68% in the last 10 years.

What markets have taken the majority of this business?

Up until now, the decrease in U.S. market share and increase for Europe and Asia can be attributed to globalisation. What will be interesting to track over the next few years is whether there is James Bergstrom, Partner, Ogier a notable shift away from the US and Europe in response to the proposed increased regulatory burden on investment managers. This could distort the continued shift of managers to Asia with Asian hedge fund market growth outpacing the general on-going economic drift east.

Has there been heavy consolidation over the last two years?

Do you think with other types of funds being offered in certain jurisdictions i.e. UCITS, QIFs and SIFs smaller players will have alternative vehicles for market entry and growth?

There is no doubt that there has been a heavy consolidation over the last two years. In fact, 2010 was the first year where new hedge fund launches outpaced fund liquidations for the first time since 2007.

The number of hedge funds totalled over 9,500 at the end of 2010 with three quarters of funds being single manager hedge funds and the remainder fund of hedge funds. The 2010 total was still below the peak of more than 10,000 from three years earlier.

During 2010, investors evidenced an increased focus on minimum assets under management (AUM) – which is traditionally viewed as an indicator of soundness – as a factor in allocating assets. Assets that allow smaller funds to grow tend to originate with institutional investors and in the last few years at least half of such investors require that a manager have US$100 million AUM or more before allocating assets, with many actually requiring significantly larger AUM of US$500 million or US$1 billion.

In terms of whether EU Undertakings for Collective Investment in Transferable Securities (UCITS) products or the Irish Qualified Investor Funds (QIFs) and Luxembourg Specialised Investor Funds (SIFs) may provide smaller players with an alternative vehicle for market entry and growth, the opposite appears true. UCITS, QIFs and SIFs are more costly and time consuming to establish, ongoing costs are higher and the strategies are limited by legislated investment restrictions that appear to produce inferior returns when compared to the traditional Cayman fund. By contrast, the lower cost, speed to market and uninhibited investment strategies allow managers of smaller funds, in particular, to stand out from the crowd in attracting additional investors and assets.

What level of importance is being placed by investors right now on having independent directors, general partners, and trustees at the head of their structures?

Investors generally and institutional investors, in particular, have placed greater emphasis on the role of fund directors, general partners and trustees since the start of the economic crisis. The volume and frequency of director due diligence questionnaires, interviews and examinations has increased and each is aimed at allowing investors and managers to evaluate the qualification and experience of those who will be in positions of fiduciary responsibility. In addition, investors and managers are looking to the manner in which the directors, general partners or trustees actually discharge their duties and interact with managers, service providers and investors. The growing body of best practice guidance and procedure is evolving towards broader industry standards, which ensure the implementation of effective corporate governance; something that is in direct response to the diligence initiatives of investors and managers.

While the emphasis on effective corporate governance and oversight to protect the interests of the investors as a whole has received greater attention since 2008, the process itself is evolutionary for the Cayman hedge fund industry. As such, while there may be a perception that independent directors have only recently focused on their roles, the genuine development – and key recent change – is the realization by investors and managers of the significance of the role of independent directors and the increased priority which investors and managers are placing on their credentials.

With the growth of UCITS in Europe, and the wide availability to market a UCITS fund, do you feel investors will choose to select a product they perceive to have much more protection?

The “hedge fund industry” is not homogeneous and all hedge funds do not have the same profile. The multi-billion dollar managers like JPMorgan Asset Management, Brevan Howard, and MAN, with their scale, middle- and back-office resources and distribution networks have little in common with managers with much less assets under management. For these managers, who represent the majority of Ogier’s clients by number, any broadening of their potential investor base by complying with UCITS standards is likely to be offset by the related cost, regulatory burdens and effect on performance. Even larger players, such as BlueCrest Capital, which recently closed down its BlueTrend UCITS fund (one of Europe’s largest), have found the tracking error to performance caused by cost, regulatory and investment limitations to be unsustainable.

Similarly investors themselves have very different profiles.

The UCITS requirements are designed to protect investors. This suits retail investors and institutional investors with a particularly low tolerance for risk and volatility. For all other investors, a UCITS fund is less of an attraction.

The reality is that even though the strictest features of UCITS have been diluted over the years to make the product more attractive to asset managers running hedge fund strategies, UCITS standards remain more restrictive than our clients are accustomed to, and the protective features may depress performance. For many, if not most US managers, this will mean that they continue to be better served by using a Cayman vehicle. a

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BVI, Cayman, Guernsey and Jersey legal and fiduciary services Welcome to Ogier

At Ogier our vision is clear… to offer the most innovative and comprehensive multi-jurisdictional legal and administrative services, through our network of offices covering the world’s key financial centres and all time zones.

‘Best Offshore Law Firm, Cayman’ 2011

We have an established, substantive presence in the key offshore jurisdictions of BVI, Cayman, Guernsey and Jersey.

‘Private Funds Law Firm Of The Year’ 2010

Hedgeweek Awards

‘Client Choice Award, Cayman’ 2011 International Law Office (ILO)

DealMakers Award Winner 2010

‘Offshore Law Firm of the Year’ 2010

Ogier has over 800 professional and support staff, including 200 lawyers and 300 professional administrators with the strength in depth to deliver service excellence to our clients.

We strive to be the best in all areas of our business and constantly seek new and creative ways to maintain our market leadership and improve our high standards of client service.

To find out more about how Ogier can assist you, please visit us at www.ogier.com or e-mail us at welcome@ogier.com

Information on the Ogier Group and details of its regulators can be accessed via our website

www.ogier.com Bahrain • British Virgin Islands • Cayman Islands • Guernsey Hong Kong • Ireland • Jersey • London • Tokyo

Chambers Europe Awards for Excellence

‘Offshore Law Firm of the Year’ 2009 The British Legal Awards

‘Top Offshore Law Firm’ 2009 Alpha Awards

‘Overall Private Funds Law Firm of the Year’ 2009 ACQ Global Awards

‘Best Offshore Law Firm’ 2009 HFM Week Service Provider Awards

Business in the Cayman Islands

MarketTalk with KRyS Global KRyS Global provides insight into the Insolvency Industry.

What changes have you seen to the type of cases you are involved in since the global financial crisis? Can you tell us a little bit about KRySGlobal’s role in the Fairfield Sentry/ Bernie Madoff case?

It could be said that the economic downturn simply reveals more easily the fraud and white Timothy Le Cornu, Director collar crime that already exists in the market as capital investment becomes scarce and investors become more sceptical about the placement and management of their capital. We continue to see a consistent demand for the type of work we do, whether it is asset tracing, liquidating or conducting a forensic review.

Ken Krys and Joanna Lau of KRyS Global in the BVI are the Joint Liquidators of Fairfield Sentry Limited (“Sentry”), Fairfield Sigma Limited (“Sigma”) and Fairfield Lambda Limited (“Lambda”) (all in liquidation). Sentry was a feeder fund which invested over 95% of its assets with Bernard L Madoff Security Services (“BLMIS”). Sigma and Lambda were two 100% feeder funds into Sentry and were respectively denominated in Euro and Swiss Francs. As BLMIS operated an elaborate ponzi scheme, all funds invested were distributed to other BLMIS investors as redemptions and all investments thought to be held by Sentry through BLMIS turned out to be fictitious.

On 6 May 2011 the Liquidators executed a settlement agreement with Irving Picard, the US Trustee of BLMIS. The settlement resolves the parties’ claims against each other, thereby avoiding contentious, costly and uncertain litigation and it provides a structure that enables the Liquidators and the BLMIS Trustee to work jointly and cooperatively in seeking and obtaining recoveries which will enhance their respective estates for the benefit of their respective stakeholders.

KRyS Global is involved with an increasing number of cross border assignments, particularly with companies holding Asian investments or subsidiaries. An independent firm, such as KRyS Global, often has the advantage over Big 4 firms of not being conflicted in the large, complex cases, particularly as KRyS Global does not offer audit and advisory services.

What trends do you see in the insolvency and restructuring industry over the next two years?

Regulatory bodies are in the process of tightening controls and increasing corporate transparency to prevent fraud and white collar crime. Those companies that cannot comply with the new standards, or who are engaged in unlawful activity may find themselves out in the cold.

Investors, unfairly or unjustly treated, may petition the court to enforce a right belonging to the company itself and/or an individual shareholder. A last resort for a shareholder who has been unfairly treated is to petition the court to wind up the company on a just and equitable basis and seek the appointment of a liquidator.

Insolvency proceedings are a powerful tool in identifying and recovering assets. If used properly, a liquidation involves the appointment of an independent professional over the person or entity to investigate its affairs and identify and recover assets.

A liquidator steps into the shoes of the directors of an entity and is entitled to information about the Declan Magennis, Manager company to which the directors would have been entitled. While liquidators have duties to the court, being independent means that they do not have any bias as to what actions are taken to procure and control assets.

Since the introduction of the various cross border insolvency provisions and the UNCITRAL Model Law in jurisdictions across the world, KRyS Global has noticed an increased ease with which the appointment of an insolvency practitioner in the offshore centres has been granted recognition in foreign jurisdictions. As an example, Ken Krys, in his capacity as the Official Liquidator of Fairfield Sentry Ltd, the largest feeder fund to the Bernie Madoff investment scheme, obtained cross-border recognition under the provisions of Chapter 15 in the US with respect to insolvency proceedings in the British Virgin Islands. This recognition enables the Liquidator to investigate and identify assets located in the US or commence actions against a party located in the US and ultimately realize recoveries for the benefit of the entity’s stakeholders.

How did KRyS Global perform in 2010? What are your goals for 2011 and 2012?

KRyS Global continued to grow and expand in 2010 and now has over 40 professionals working from offices in four jurisdictions— with established offices in the Cayman Islands, the Bahamas and British Virgin Islands, and a new office opened late 2010 in Bermuda.

KRyS Global only provides insolvency, liquidation, corporate recovery, forensic accounting and related services which enables us to provide independent, focused and experienced service to our clients. Our staff are experienced and qualified in the field of insolvency and forensics, and we ensure all engagements are carried out by closely managed teams led by a dedicated director. Clients benefit from these close-knit teams of Professional Accountants, Certified Fraud Examiners, Insolvency professionals and Certified Anti-Money Laundering Specialists. Our practical hands-on approach, along with the depth and range of experience of our professionals, ensures our clients receive answers and remedies specifically suited to meet their needs and demands.

A majority of our work has a cross border element to it, and in this regard, KRyS Global is a member of hww insolvency cooperation partners, a dedicated group of local insolvency specialists in 20 jurisdictions across the US, Europe and Asia. The groups’ objective is to derive the best solutions in cross-border cases by working with a number of other independent insolvency practitioners. a

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Corporate Recovery & Insolvency Fraud Investigation & Forensic Accounting Litigation Support Business Valuations Regulatory Compliance Money Laundering Investigations Business Advisory Services

Guiding Your Way To Success.

KRyS Global, a specialized corporate recovery and insolvency firm, is a team of independent, dedicated and knowledgeable professionals with practical expertise, global experience and the ability to provide objective, sound advice.

We provide solutions to complex cross-border issues in the areas of Corporate Recovery, Insolvency, Forensic Accounting and Business Advisory Services. With over 40 professionals who work from offices in four jurisdictions, our Clients benefit from a close-knit team of Professional Accountants, Lawyers, Certified Fraud Examiners and Certified Anti-Money Laundering Specialists. Through vigilance, dedication and thoroughness, we are committed to being the global leader in our industry, delivering results and achieving exceptional value for our Clients. www.KRyS-Global.com TM

Global Complex Issues. Resolved.

White Collar Law Firm of the Year and International/Cross Border Law Firm of the Year in the Cayman Islands

Cayman Islands British Virgin Islands Bahamas Bermuda

Business in the Cayman Islands

Medical Tourism: A Major New Industry for the Cayman Islands In today’s turbulent world it’s not often you find a man who can be successful and yet so charitable. Dr. Devi Shetty gained worldwide accreditation for successfully treating Mother Theresa for heart disease in the 1990’s. A strong friendship ensued between the Doctor and his patient, and she would often accompany him on medical rounds holding his hand and comforting his patients. Dr. Shetty is looked at as a saint himself for providing thousands of medical procedures and surgeries to the poor of his country without charge. Dr. Shetty’s Narayana Hrudaylaya Health City in Bangalore, India, hosts the world’s largest heart hospital, the Asia’s largest cancer hospital, and full research centre. All of this while keeping costs low or even free in some cases. Dr. Shetty created a Micro-insurance program several years ago that has provided medical treatment to over 85,000 impoverished farmers for the cost of roughly 2 GBP a year. Maintaining a successful business model that provides for these treatments and still enables full operations on scale with any Western hospital has been key for Dr. Shetty, and has not gone unnoticed. Famed medical institutions from the Cancer Research Centres of America to Johns Hopkins Medical Centre have invited Dr. Shetty to gain expertise and knowledge from him.

At the time of Dr. Shetty’s first arrival in Cayman the country desperately needed further revenue streams from foreign direct investment to ease pressure off the financial services and tourism sectors. Premier McKeeva Bush initiated a meeting with local businessmen and entrepreneurs Gene Thompson and Harry Chandi.

The conversation was straight forward and purposeful and centered around attracting a large scale foreign direct investment project that would be a major contributor to the Cayman economy and create a host of downstream industries. They soon reasoned that medical tourism was perfect for Cayman. An hour’s flight to Miami, a first world locale, a 5 star leisure tourism market, a developed infrastructure, and a most importantly a government that supported foreign investment. After many large scale presentations to government, local constituents and business people, Dr. Shetty’s vision finally came to light. The Narayana Cayman Medical Centre will be the largest and most costly project ever constructed in Cayman. It will be set on 300-500 acres and will be built in phases over the next 15 years at a total cost of $2 billion dollars raised through private financing by Dr. Shetty and his team.

The centre itself will consist of three main areas: the hospital, a university which will train nurses, medical technicians, dentists, and doctors, and an assisted living community where residents’ needs will be attended to by hospital personnel. The assisted living facility is garnering a lot of attention at the moment.

The industry is starting to see large scale growth due to the baby boomer generation retiring in both the US and Europe. Spending your golden years in the Cayman Islands where sunshine is abundant will not be a hard sell for most people especially when the care provided is at a Western standard and priced significantly lower than their home countries offerings. With continued increases in US healthcare costs Dr. Shetty and his team will be able to offer heart bypass surgery for nearly 60% less than healthcare

Downtown George Town, Grand Cayman systems currently offer in the US. The track record of the organisation speaks for itself and because of this negotiating deals with US health insurers should be just another step. Narayana Cayman Medical Centre, once completed, is estimated to bring in between 1,200 and 2,000 additional air arrivals to Cayman every day.

While Dr. Shetty and his team will manage all business within the medical centre there is expected to be a host of downstream industries created. Caymanians will have the chance to start everything from medical waste disposal companies to small grocery stores around the centre. The healthcare industry is one of the few growing industries worldwide. The fact that Cayman lies so close to the USA, a nation with a huge demand for low cost healthcare with 306 million people, the opportunity to create businesses off such a large potential customer base will be widely available. In fact a recent study done on the projected economic impacts of the medical centre recently done by international accounting firm Grant Thornton suggests that: • $150 million will be spent in Cayman in the first 2 years; including $100 million in construction cost and $33 million in labour.

• More than $170 million will be derived in duties over the next 15 years.

• More than $270 million dollars spent on locally purchased materials over the course of construction.

• More than $300 million will be paid to local labour over the course of construction.

• By 2024 2,500 Caymanians are expected to be employed as medical and operational staff.

The significant benefits the Narayana Cayman Medical Centre will bring to the government, local citizens, and business in Cayman cannot be overstated. For Premier Bush this project is of extreme value because he knows over time Cayman has the opportunity to be the main provider of medical tourism in the Western Hemisphere. When thinking of strategic location and direct flight opportunities combined with friendly people who have already mastered 5 star customer services there really is no other country that can currently compete with the Caymans Islands in the field of medical tourism in this part of the world. With updated legislation already being passed by the Cayman government, the Shetty group will begin construction this year, and the plan of saving lives in the West through low cost healthcare is a reality in the foreseeable future. a

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Business in the Cayman Islands

Cayman Enterprise City Creating a Third Pillar in the Cayman economy.

Cayman Enterprise City (CEC) is a newly proposed Special Economic Zone to be developed on Grand Cayman.

It will be the premier free market business environment in the western hemisphere featuring the benefits of economic freedom in a virtually tax free environment. The plan is to create, a small low rise yet high performance state-of-the-art campus of innovative and sustainable architecture and designed to respect and complement the local environment. The five campuses will be developed in three phases comprising of 500,000 sq. feet of Class A office space.

CEC will first and foremost be a hub fostering collaboration and innovation through commitment to knowledge based industries, education and commerce both regionally and internationally. It will provide a strategic and cost effective base for businesses seeking to establish in the strategically important region of the Americas and will address the needs of international business by introducing a series of best-of-breed solutions to become one of the leading Special Economic Zones (SEZ) in the world.

Leading global brands and innovative entrepreneurs will be attracted to CEC’s inspirational, rapidly growing business community. The project will integrate world-class retail and recreational facilities creating the most inspirational and productive working environment for your management and staff. CEC is not a financial services centre and will not be competing with any existing financial services firms in Cayman. In fact CEC will be a new revenue generating source for existing financial services firms in Cayman by enabling them to offer their client base a new and exciting way to establish their business and invest in Cayman.

The Parks Cayman Internet Park (CIP) will represent the largest Information and Communications Technology (ICT) cluster in the region. The ICT will host a dynamic international community of IT companies which will include Fortune 500 brands as well as a number of growing enterprises, entrepreneurs and ventures. CIP will be a strategic base for companies targeting emerging markets in the neighbouring regions which cover nearly a billion people with a GDP of over US$22 trillion—representing around 30% of the world’s GDP. CIP will also provide an environment that attracts all elements of the technology value-chain, allowing technology companies to innovate and create in one of the most business focused environments in the world.

• Internet and Multimedia • Telecommunications and Networks • IT Services Cayman Media Park (CMP) will be the preeminent global media centre in the Americas and will provide an advanced infrastructure and supportive environment for media related businesses to operate globally from the Cayman Islands. As the exclusive media hub in the Americas, Cayman Media Park will be the catalyst for media development in the 21st century.

CMP is a place where every kind of media business can operate with collective collaboration and commitment including: • Media and marketing companies • Publishing

• Music, film and new media

By Jason Blick CEO of • Leisure and entertainment Cayman Enterprise City • Broadcasting and information agencies.

CayBiotech, Cayman’s Biotechnology Park will become a major life sciences industrial cluster in the Americas and beyond. CayBiotech will focus on the needs of major pharmaceutical firms as well as companies specialized in biotechnology, R&D and pharmacology, cosmesis and enzymes. CayBiotech codes of practice are based on international best practices and cover all activities from Research and Manufacturing to Health and Safety. These Codes of Practice are in-line with those of the US Food and Drug Administration (FDA) and World Health Organization (WHO), European Agency for the Evaluation of Medicinal Products (EMEA).

The park will: • Enjoy a strategic location with world-class infrastructure • Be designed to attract the best life sciences companies and facilitate their rapid development Cayman Global Commodities Park (CGCP) will be established to deliver a world-class and dedicated infrastructure to the commodities sector. A strategic initiative created to centralize the global commodities market in the Cayman Islands. Cayman will become the leading commodities centre in the America’s time zone, bridging the gap between the Americas, Europe and beyond.

CGCP will actively support commodities trading by providing cutting edge services including supply chain management, efficient governance and international best practice. We will offer an extensive range of products and services covering: • Physical commodities • Financial markets • ETFs and derivatives • Creation of a dedicated market place in Cayman • Increase value and volume of commodities traded in and throughout the region Cayman International Academic Park (CIAP) will be the world’s only Technology, Communication and Commerce SEZ dedicated to Higher Education. Established to complement the needs of private industry within Cayman Enterprise City, CIAP will be a premier destination for Higher Education in the region located on a fullyappointed campus with state-of-the-art facilities. CIAP will license: • Universities and branch universities • Junior colleges and online universities • Management development centres • Education service providers Cayman Enterprise City is set to create up to 800 jobs in the first year alone. Over time the project is estimated to bring up 10,000 jobs into the Cayman economy, with an estimated 5,000 jobs within the CEC zone and another 4,800 in the national economy.

Another welcomed benefit will be new management training and career enhancement programmes which will be implemented for Caymanians. Indeed this will begin a new era in Cayman, where diversification from financial services and tourism will be achieved and Cayman will be open to new innovative fields which the CEC will house. a

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Business in the Cayman Islands

Flight to Quality A Private Look at the Aviation Industry in Cayman.

The Cayman Islands have been a major jurisdiction for aircraft registration for the better part of the last 40 years.

As more international companies were attracted to the islands because of the strong financial services community and the offerings they provide, the Cayman Islands government took advantage of these HNWI by offering extraordinary services. As the capital inflow from wealthy individuals and corporations continued to flow in, the service offerings of Cayman continued to grow.

Individuals across the world found numerous advantages of registering a yacht and aircraft in the same place as their business was licensed and accounts held.

The role of the Civil Aviation Authority of the Cayman Islands is to function as the regulatory organisation responsible for safety and economic oversight of the Cayman aviation industry. Their main duty is to ensure that the aviation sector meets all standards set by the International Civil Aviation Organization (ICAO).

Of course another main activity of the CAACI is to maintain and grow the aircraft registry which is a key driver of revenue. To this regard the CAACI participate in industry trade shows and public-

ity events across the world and are known to operate as a registry of choice and not convenience.

Whilst the majority of aircraft registered on the CI Registry rarely come to Cayman. There has been an increased issuance of operating permits to foreign registered aircraft to operate into the territory, in fact operating permits for non-scheduled operations such as business and leisure charters increased by over 25% from 2009 to 2010. This trend has undoubtedly increased business for service providers such as Island Air a local ground handling and FBO services partner of CAACI who service the foreign registered carriers that operate into the territory. CAACI’s relationship with Island Air is through the safety and economic regulatory role of the CAACI to ensure that not only aircraft on the CI Register are operated in accordance with regulations and international standards but also that foreign registered carriers/operators coming into the territory meet the safety standards. As such the CAACI issues an operating permit to foreign registered carriers/operators based on requirements to operate scheduled and charter services to the jurisdiction.

Photograph courtesy of Lukas RĂśsler

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Business in the Cayman Islands Many of these foreign registered aircraft have utilized the services of Island Air since 1987 when the company first started operations in Cayman. Island Air provides fuelling, hangar space for aircrafts, leasing and financing of aircrafts, and arranging charter flights. Of course when you’re dealing with fabulously wealthy people who globe trot in their luxury aircraft the services can go well beyond that. As Mr Cumber, CEO of Island Air, states “Time is money for business travellers. Private charters are even more popular among top corporate executives whose time is too valuable to waste in long queues at busy airports. There is no question of delayed or cancelled flights; as the private flight is scheduled only at the time you want. In fact some organisations don’t mind spending an extra bit on arranging private jets for not only their top executives but senior staff too.”

With worldwide financial troubles still looming, the trends for the private airline industry and even registrations continue to be uncertain. Although some HNWI’s have incurred significant liquidity issues over the last 2 years, most have not. The industry, just as in super yachts, has declined slightly but overall has maintained stability. In 2010 the CI Aircraft Registry saw most activity come from changes in ownership, repossessions, and some deregistrations, although the total numbers of aircraft on the registry remained stable. And while aviation trends differ depending on the sectors, with the public sector most likely to see more consolidations as the cost of fuel goes up, the business/corporate aviation field seems to be positive. Aircraft sales and thus registra-

tions are expected to be constant and see growth through 2011.

The interesting point about this trend, especially in the Cayman context, is that most of the new registrations coming to the jurisdiction are from Europe, the Middle East, and now Asia. The CI Aircraft Registry is mainly driven by corporate/private aircraft and as the shift in global wealth continues to go from West to East more and more companies and individuals are looking into financial jurisdictions that have safely guarded the riches of the West for some time.

CAACI regularly attends worldwide conferences to promote Cayman aviation and attract aircrafts to its registry. CAACI regularly invites local partners on publicity trips to showcase the strength of Cayman’s aviation sector and this year along with Island Air, attended the European Business Aviation Conference & Exhibition (EBACE), the premier annual meeting place for the European business aviation community. The fact that the Cayman Aviation industry strictly follows international standards and recommended practices as written by ICAO provides great comfort to corporations and individuals who might use the services of the Cayman Islands whether it be to register their private jet or simply refuel on their way to adventure holiday in Cuba or South America. The CAACI will no doubt remain very exclusive and selective in accepting aircraft to the Cayman Islands Aircraft Registry, but rest assured with the world’s security fears and increased difficulty manoeuvring through crowded airports the private aircraft industry is set to take off. a

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Business in the Cayman Islands

Cayman Shipping Registry Picks Up Pace 2010 was a Great Year for Cayman Maritime, 2011 Looks Like Smooth Sailing.

Cayman is a world leader in the registration of superyachts with 75% of the vessels listed on its register being private yachts. The remaining fleet is made up of commercial vessels including commercial yachts and a wide range of cargo ships. As a Category 1 Red Ensign Register, Cayman is able to register a vessel of any age, type and size, providing it meets the requisite international standards, as well as those of the Cayman Registry itself.

Despite economic difficulties worldwide, 2010 was a spectacular year for the Cayman Shipping Registry, and in many respects, proved to be the best year ever since the inception of the Register in 1903. At the end of 2010, both the total number of vessels registered and combined gross registered tonnage hit a record high.

The total number of vessels listed on the Register reached 1,870, up from 1,815 in 2009 and gross registered tonnage increased from 3.7 million in 2009 to 3.9 million in 2010, significant tonnage figures for a niche market registry. Furthermore, the Register managed to attract an impressive 254 new vessels in 2010; only in 2008 did the Register gain more registrations in a single year, with a total of 275.

The success has not come without the hard work, dedication and expertise contributed by the team at the Cayman Registry.

Besides having a record-breaking year, the team saw the launch of the 13-36 Passenger Yacht Code. The Cayman Registry was instrumental in developing the new code, an initiative they led and developed over the last three years with the support of their colleagues in the Red Ensign Group of Administrations. The code was developed in response to the increase in demand for larger passenger super-yachts, which did not fit within the scope of the existing codes. Peter Southgate, Advisor for Maritime Policy and Legislation Development at the Cayman Registry, points out that whilst the existing Large Yacht Code has been the accepted standard for the construction of large yachts worldwide, “The 12-passenger restriction has been regarded by many as an obstacle to progress.” Furthermore, he adds “The International Convention for the Safety of Life at Sea (SOLAS) already contains provisions for vessels carrying up to 36 passengers, but the current standards were not necessarily a good fit with the design ethos and use pat¬terns for large yachts.” Mr. Southgate clearly sees the benefits of the Passenger Yacht Code to the large yacht industry stating, “This enables vessels to be built to a recognised safety standard, to accommodate up to 36 passengers in both commercial and private use, thus allowing owners to achieve their aspirations of luxury accommodation afloat without any compromise in safety.”

Last year, the Cayman Registry maintained ‘white list’ status from both Paris and Tokyo MOUs. This year they also gained re-entry onto the Qualship 21 programme, for vessels on the top tier of the US Coast Guard Port State Control Scheme. In addition to en-

hancing their quality within important Port State Control MOUs, the Maritime Authority of the Cayman Islands also regained ISO 9001:2008 certification, which is globally regarded as the most comprehensive body of standards on quality management systems and practices. In 2005, the ISO certification was voluntarily renounced in order to eventually reflect the organisational restructure from a government department to a government-owned company. MACI’s commitment to reinstate the ISO 9001:2008, further demonstrates the organisation’s dedication to quality and maintaining Cayman’s leadership position and world class status in the shipping industry.

Since 2004, the Cayman Registry has been working to enhance their global surveyor coverage as they have long recognised that survey costs and accessibility are two critical factors for ship owners when considering the choice of flag. In 2010/2011, three new surveyor placements were made in Houston and Fort Lauderdale, USA; and Amsterdam, Netherlands adding to the existing surveyor coverage in George Town, Cayman Islands; Southampton, England; Athens, Greece; Hong Kong; Antibes, France; Tokyo, Japan; Long Beach, USA; and Genoa, Italy. Peter Southgate explains “The objective of this expansion is ultimately to create a world-wide network of surveyors and, as far as is practicable, to ensure that a surveyor can be economically accessed across the various time zones, keeping travel time and expenses to a minimum. Additionally the surveyors are on hand to provide assistance during port state control inspections and other assistance as required by our clients.”

Another benefit of adding to their surveyor network lies in the fact that the Cayman Registry also maintains a large portfolio of ‘new-builds’ or ships under construction. Its surveyors keep a consultative eye during the entire construction phase to ensure that all vessels are built to the highest international construction standards and regulations. The vast majority of these, upon launch, then ‘flag’ Cayman. For new-build yachts in particular, Cayman is the flag seen around the world and as of December 2010, there were 211 Cayman yachtsunder construction worldwide.

With signs of recovery in the global economy, the Cayman Registry is optimistic that there will be a recovery in the number of super-yachts being built and an increase in overall size, as a result of the newly developed 13-36 Passenger Yacht Code. They will continue their promotional activities by participating in global industry events such as this year’s Monaco Yacht Show, Ft. Lauderdale International Boat Show and be the single flag state sponsor at the Global Superyacht Forum. CEO of MACI, A. Joel Walton, believes “It is partly through the relationships forged through these promotional initiatives that the Cayman Registry has been able to achieve the status of global leader in the registration of super-yachts. These are vitally important venues for us to see, and be seen in.” a

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Today, you’ll see the Red Ensign of the Cayman Islands on ships and yachts around the world. Why? As a Category 1 member of the prestigious Red Ensign Group, we offer vessel registration with a wide range of ownership structures, and with numerous registration options. All backed by modern and robust maritime legislation that allows flexibility and pragmatism without compromise.

FULL AHEAD.

With representatives in all the main international shipping centres, you enjoy the highest standard of service, expertise and efficiency whenever and wherever you need it.

ARE YOU FLYING THE FLAG?

Our services include: Vessel Registration; Survey and Certification; Crew Compliance; Vessel Construction Supervision; and bespoke Maritime, and related, Consultancy Services

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Business in the Cayman Islands

Cayman Islands Real Estate, A Great Investment Choice Live the best of both worlds!

The Cayman Islands, enjoys a high degree of political, economic and social stability. One hour south of Miami, Grand Cayman has direct airlift and jet service to over 14 cities in North America, Central and South America and Europe. The Cayman Islands impose no direct taxes - no property, inheritance, gift, corporation, capital gains, value added, sales or income taxes.

The only duty real estate buyers are required to pay is a onetime stamp duty (currently between 6-7.5%) within 45 days of closing for transfer of title. All land in the Cayman Islands is recorded in a single registry under a unique block and parcel number. The land registry is maintained by the government which effectively guarantees title, so title insurance is not necessary.

The Cayman Islands is the fifth largest financial centre in the world. In the past decade the Cayman Islands has diligently worked to enhance its reputation as a professional, well-regulated jurisdiction and has enacted anti-money laundering legislation.

Property purchaser may still choose to keep their ownership private. Properties may be held in easily set up Cayman corporations or trusts, keeping beneficial ownership confidential. There is no restriction on foreign purchasers’ setting up a corporation or trust. A purchaser in today’s market can afford themselves with a substantially attractive inland property for USD200,000 to a multi-million dollar property high on a cliff or right next to a soft coral sandy beach. The variety of property selection is fabulously abundant. We really do feel that the Cayman Islands real estate is extremely good value for the investor’s money and comparative to the immediate geographical countries, property is tremendously well priced.

Cayman Islands Residency Grand Cayman boasts a vibrant community of both full and part-time residents who are successful businesspeople, investors and entrepreneurs, and the Island encourages residency applications which provides a key into this very close knit but friendly community. Property owners can simply apply for permanent residency, which allows you to spend unrestricted time in the Cayman Islands. The only requirements are property ownership exceeding KYC750,000 (USD915,000), a onetime fee of approximately USD18,000, a clean police record and strong bank and personal references.

Market Performance The Cayman property market has fared very well during the global down turn proportional to the global market, Cayman Islands properties have held their value better than most countries including the USA, Europe, Panama and neighbouring Islands. The slow but definite upward trend, while not coming into a seller’s market just quite yet, is a promising one to say the least. Having seen the 2009/2010 market being somewhat slow while still affording our property investors with a sound investment we are now seeing an upward movement in property prices, especially along our prestigious Seven Mile Beach and Rum Point/Cayman Kai areas of the Island. The remainder of 2011 and coming into 2012 will be enjoyable times for the investor/property purchasers that let us, the Broker, assist them to make solid investment engagements.

West Indies Brokers Our real estate specialists have in-depth knowledge and experience in all areas of Cayman Islands real estate market. We listen to the our customers investment needs and concerns, evaluate long and short term property investment agendas and make the most astute recommendations for the protection of our customer’s investment. We are here to assist finding the perfect property be it for a single time residential investor or a multi-level commercial investor, it is what we do and what we enjoy and are good at.

One aspect when you are purchasing property in the Cayman Islands, is that most reputable Real Estate firms are members of the Cayman Islands Real Estate Brokers Association (CIREBA) and in turn the MLS System (Multiple Listing System), provides the purchasing investor the knowledge that their Broker has the access to 99% of the properties for sale on the three Cayman Islands (Grand Cayman, Little Cayman and Cayman Brac) and will gladly show any or all of them.

With the current USD/Sterling exchange rate, Cayman properties are very affordable. Londoners can most likely find exactly what they are looking for, shall it be an investment property, a part time residence or a full time residence. The natural beauty of Cayman combined with a stable government, affluent population and sophisticated infrastructure has contributed to one of the region’s strongest real estate markets and will continue for years to come—let us help you find your perfect investment. a

By Malin Ratcliffe – Owner, West Indies Brokers

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Business in the Cayman Islands

Camana Bay Business is flourishing in the Caribbean.

Camana Bay

When the Dart family first came to Grand Cayman in the 1980s they saw a pristine island with good infrastructure that was ideal for investment. Years in the making, that investment has blossomed into Camana Bay with more than 300,000 square feet of office space to date, an international school, apartments, shops, restaurants, cinema and soon-to-be-built homes and condominiums. The creation is an environmentally sound, culturally sensitive live/work community that truly does flourish.

While Camana Bay offers a prestigious address to the international business community, doing business here means more than just setting up an office; the development is fast becoming the place where companies are taking care of business and their employees. Consistent with its New Urbanism design philosophy of live, work, play, the development is focusing on attracting some of the world’s leading companies by offering not only a turn-key headquarters solution, but also underscoring the importance of a quality work and lifestyle environment.

Camana Bay was developed by Dart Realty (Cayman) Ltd. in collaboration with an exceptional team of visionaries, including architects, city planners, landscape designers and artisans. Together, they have created a unique community where the vibrancy of island living is enhanced with the conveniences of an urban environment. The Town Centre is the heart of Camana Bay and was designed to be the hub for food, entertainment, fashion and fun; events are an integral part of everyday life, with frequent concerts, community and cultural events and family activities. This year the Town Centre received the first annual Governor’s Award for Design and Construction Excellence. The award recognizes projects that encourage, foster and maintain innovation, sustainability and design excellence in the Cayman Islands.

The developer has also invested heavily in making sure that all companies have state-of-the-art premises, technology and business continuity amenities to rely upon. Camana Bay has all the amenities that any large corporation would need including a cutting-edge data centre, disaster recovery facilities, physical site security, environmental controls and power protection to alleviate the concern of operating the business through a weather crisis.

The data centre is one of the most technologically advanced and physically secure in the region with its superior communications infrastructure being particularly suited to the banking, financial services, legal, accounting, insurance and retail sectors. Camana Bay has already attracted the Caribbean headquarters of Ernst & Young, Ogier, Grant Thornton, and others. Currently there are over 1,000 people living and working within Camana Bay and the developers recently broke ground on a new 68,000 square foot building to house international law firm Mourant Ozannes.

For the expatriate family looking to relocate to Grand Cayman, the Cayman International School (CIS) is a world-class educational facility, providing college preparatory academics and extracurricular programmes to students from pre-kindergarten to Grade 12. CIS is part of a prestigious network of international academies and the school was recently accepted into the International Baccalaureate programme. The campus also includes a professional grade football pitch, two tennis courts, two basketball courts, a 25-metre swimming pool and the Arts and Recreation Centre, an award-winning, multi-purpose building for sports and community events.

Both economically and socially, Camana Bay has greatly impacted the Cayman Islands by generating economic activity and employment, all the while fostering a sense of community. Walking out your door, strolling down the sidewalk, stopping for coffee and walking into a beautifully designed office building is a luxury for anyone; doing it in the Cayman Islands is a privilege. The fact that after leaving Camana Bay you are five minutes away from the airport, and two minutes to Seven Mile Beach makes for a tempting work environment. Clearly the developer is committed to Cayman, and, as such, large corporations are willing to establish a presence at Camana Bay. The fascinating part is that the development will continue to grow over the next two decades far surpassing what was once just a vision. With Dart Realty’s intuitive development approach and sense of local culture and appeal the development will continue to blossom with time.

For more information about establishing your business at Camana Bay, call (345) 640-4000 or email info@camanabay.com. a

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The Grand Caymanian Resort

The Grand Caymanian Resort promises a world-class vacation in one of the world's most beautiful destinations. Luxury, convenience and fun are the hallmarks of this award-winning resort.

Gracing the shores of the North Sound Lagoon, you will find every amenity on site including snorkelling and diving, personal watercrafts, pools, huge beachfront sun terraces, restaurant and bar, world-class golf, and concierge services...the list is endless! If you ever do feel the need to venture away from the resort, you will discover the Cayman Islands legendary hospitality and friendliness in an island environment that is refreshingly safe and welcoming.

Is Your Caribbean Playground!

World Famous

The resort is built in a British-Caribbean style and includes: a swimming pool, children’s pool, tennis court, an air-conditioned restaurant and bar and a dive and water sports sundry shop. The large one and two bedroom suites are beautifully appointed and furnished and come complete with every item necessary for a wonderful vacation experience. The brand new phase of the Grand Caymanian Resort is now complete. The 44 unit Condo-Hotel compromises of two bedroom units with most of them providing a lock off feature. These units are offered for whole-ownership.

T: 345-949-3100 • F: 345 949-3161 • Email: reservations@grandcaymanian.ky • www.grandcaymanian.ky