With Brexit looming and more international focus than ever on the offshore financial services sector, Cayman Islands representatives have taken over leadership positions in the British Overseas Territories Association at a key time.
Cayman’s London Office Director Eric Bush was elected as chairman of the territories association last week, the first time a Caymanian London office director has served in that role in more than a decade.
Mr. Bush’s election means Premier Alden McLaughlin becomes president of the territories association’s influential political council, which meets before and during the Joint Ministerial Council discussions with the U.K. government, held toward the end of the year.
It also means Cayman will host the pre-Joint Ministerial Council meetings – which are typically held in late summer between the overseas territories leaders.
“The political council [is] the highest decision-making body which sets the policies of the association and approves all decisions, activities and agendas,” a statement from the London Office released last week read.
Cayman and the British Virgin Islands will co-chair the association’s financial services subcommittee, which focuses solely on developments in the financial services sector.
On Thursday, Mr. McLaughlin said the Cayman Islands remains the world’s “jurisdiction of choice” for hedge funds business during the annual Fidelity Cayman Economic Outlook conference at the Kimpton Seafire resort, despite challenges it has faced in recent years.
“Our main challenge going forward is to protect the businesses that we now have, and to prepare ourselves to take advantage of emerging trends,” he said.
“For many years the Cayman Islands has had to contend with the Hollywood image of a jurisdiction of numbered bank accounts and bank secrecy.
“As we pass each test, the game is changed – and we so we fight on.”
Mr. McLaughlin said Cayman avoided being blacklisted by the European Union’s finance ministers late last year, after a review of 60 countries aimed at determining which ones were considered “non-cooperative” in their financial reporting and taxation regimes. The premier has said Cayman, and other territories, will continue to need the U.K.’s support in making their case to the EU, which places more importance on the end-of-year Joint Ministerial Council meetings.
“[The EU officials] were all very complimentary,” the premier told the Fidelity conference on Thursday. “But they still had a hard time understanding how it is that we have no form of direct taxation, yet are able to operate a modern economy and government. For some this seemed to indicate that something must be wrong.
“Whatever one may think of [U.S.] President [Donald] Trump’s early morning tweets, there is one thing I believe he has gotten absolutely right: excessive levels of taxation stifle economic growth. And despite the contrary views that prevail in the EU and left-leaning organizations such as the Tax Justice Network, no country will ever tax its way to prosperity,” the premier said.