Of course, all this comes at a price, and it`s not a small price either. The cost of living in the Cayman Islands is quite high, as is (as we`ll discuss in a moment), as is the cost of obtaining residency there. The Cayman Government receives revenue from fees related to tourism, work permits, financial transactions and import duties. Import duties on goods imported into the islands are very high, ranging from 22% to 27%. A handful of items are duty-free — baby food, for example — while high-end items like luxury cars are subject to a customs duty of up to 42%. If most of the goods you buy are marked to this degree, the cost will add up quickly. For this reason, unless you are wealthy enough and the additional cost is not significant, Cayman can work better for you as an offshore banking center without considering the possibility of residency. In addition to a world-class financial industry, there is a strong tourism sector and an active rental market. There is no obligation to pay taxes on income from renting a property, and therefore owning property on the islands can generate rental income throughout the year. This trade deal has its critics who say the structure is a loophole that allows funds to avoid taxes.
The Trump administration`s Tax Cuts and Jobs Act made some changes to the interest-bearing rule. By law, funds must hold assets for more than three years for profits to be considered long-term. Profits held for less than three years are considered current and are taxed at the rate of 40.8%. However, this change rarely applies to most funds, which typically hold assets for more than five years. The Cayman Islands are one of the most beautiful islands in the Caribbean and one of the leading offshore banking and investment jurisdictions. The Cayman Islands are the pinnacle of international taxation and business. Here`s how to move your business to the Cayman Islands and not pay U.S. taxes. In addition, the Cayman Islands are attractive as a place to live because of the quality of life. Not only are the islands beautiful and temperate year-round, but with two international airports, travel to and from the Cayman Islands is convenient, and they have excellent local services, excellent transportation and communication facilities on the islands, world-class shops and restaurants, world-class private hospitals, and excellent schools and educational opportunities for families. Plus, their banking and financial services industries and the infrastructure built around them are as good as anywhere else in the world. The Cayman Islands as a tax haven offers a very attractive platform for foreign individuals and companies to provide banking services.
These foreign parties can avoid paying income tax in their country of residence by using Cayman Islands offshore banking. So what are the tons of money? In addition to being able to prove that you have an annual income of at least $120,000 per year in Cayman Islands dollars (1 AI = $1.20) outside the Cayman Islands, you must open and maintain a bank account of at least $400,000 and invest an additional $1,000,000 in the Cayman Islands. of at least $500,000 of that amount must be in real estate. If you don`t mind living in Little Cayman or Cayman Brac instead of Grand Cayman, you can prove that you have an annual income of $75,000 from outside the islands and invest CI 500,000 in the Caymans, at least half of which must be in real estate. WASHINGTON, June 11 (Reuters Breakingviews) – The Cayman Islands will be fine. The offshore tax haven is theoretically plagued by global reforms that could impose a general burden on businesses, an attempt by world leaders to reduce profit shifting and generate revenue after a year of government stimulus. But many of the respite the islands give to their preferred sector of hedge funds and other investment firms may persist despite pressure for companies to pay more. And exceptions abound, suggesting that Caymans may find them too. While the Cayman Islands are primarily known for their beautiful white sand beaches and turquoise waters of the Caribbean Sea, these islands are also known for their favorable fiscal environment. But is the Cayman Islands really tax-free? The short answer is yes.
Cayman offers a welcoming approach to taxes that is accessible to foreign citizens around the world in terms of more than just commercial terms. The standard method for obtaining a residence permit for the Cayman Islands is to apply for a temporary residence permit (25 years) as a person by independent means. While arriving with a work permit obtained from a sponsoring company that allows you to legally live in the Cayman Islands for the 8 years required to apply for residency is the cheapest and theoretically possible way, it`s much harder than dropping a ton of money to roll out the red carpet for you (although see the Global Corporate Citizen Program discussion below). However, it is important to note that time spent in Cayman under the Global Citizen Concierge program does not count towards permanent residency on the islands. If you want your time in Cayman to have the opportunity to count towards permanent residency and citizenship, consider the Global Corporate Citizen program. Fortunately, the Cayman residency program is designed for Americans. It allows you to qualify for the foreign earned income exclusion by using the residency test instead of the physical presence test. Resideing in Cayman means you can spend 4 months or more in the United States each year.
Without residing in the Caymans, you are only allowed to be in the states under physical presence testing 35 days a year. Residency will greatly facilitate eligibility and use of the IEEF. The Global Corporate CItizen program is an initiative organized by Cayman Enterprise City (CEC) that allows the owner of a global business to operate from the Cayman Islands. The program allows wholly foreign ownership under a business license called Zone Commercial Certificate, which allows foreign companies to locate in the Cayman Islands and benefit from the neutral corporate and personal tax platform offered by the islands. With a 5-year zone work certificate, which is a work/residency visa, the business owner is considered a resident of the islands.