Moving From Barbados To Cayman
The distance from Barbados to the Cayman Islands is 2,415 kilometers, or roughly 1,500 miles, which is about the distance from New York City to Dallas, TX. While making the move from Barbados to Cayman does not involve anywhere near the same cultural changes, it may be helpful to consider the differences that exist between the two Caribbean domiciles.
Both island nations are known for their spectacular beaches and tropical breezes. However, recent developments as well as more fundamental differences underscore a change in lifestyles that is both subtle and profound.
A quiet culture.
Newcomers to Cayman are often surprised by the more relaxed, carefree and quiet lifestyle when compared to other Caribbean destinations. The environment gets its character from the friendliness of the local people and the high value placed on personal safety and security.
This laid-back atmosphere likely helps explain the presence of a large and vibrant community of expatriates who reflect a surprising global diversity. This can be quite appealing to those who are used to the closely-knit local community of an island like Barbados. One might say that in Cayman, the larger world becomes small without seeming confining.
The breezy local culture belies the strength of the local economy. With Cayman comes the promise of financial strength underscored by a stable local currency. While recent tightening in global currency markets has produced uneven effects on local economies elsewhere in the Caribbean basin, the strength of Cayman’s fundamentals could signal that now is a favorable time to think outside the box and consider reviewing one’s options for a captive domicile.
Positive challenges, positive change.
There are other common differences between the two island nations, especially in regards to the captive insurance community. Cayman’s proximity to the mainland has produced a U.S. captive base with a predominance of healthcare captives. In fact, the most mature captives in the community are those in the healthcare space. Barbados, on the other hand, has evolved as a predominantly Canadian base with a culture of workers’ compensation captives.
For this reason, a move to Cayman affords the opportunity for greater exposure to U.S. rules and obligations. Cayman’s reputation as an acknowledged leader in the captive industry confers certain additional benefits. For instance, changes in captive rules and regulations are ordinarily first observed in the Cayman Islands, producing a heightened awareness and state-of-the-art captive expertise.
The upside is the greater confidence one acquires in such an environment to speak to the needs of the client. When combined with the international clientele, this opens up opportunities to develop personal skills such as networking and creative problem-solving for clients of varying backgrounds.
A domicile-to-domicile comparison.
Of course, a practical way to look at the two domiciles is to compare Barbados and Cayman Islands by the numbers.
Before restructuring, Barbados was known to have tax rates of 0.5% graduating to 2.5% for companies registered as international business entities. Barbados also had in place taxation treaties with more than 30 nations ranging from Canada, U.S., U.K., Singapore, China and many E.U. countries. Many of these treaties dated well over 35 years.In contrast, Cayman has neither an income nor a corporation tax. Then, there are the captives themselves. Barbados numbers approximately 250 captives, ranking 7th in the captive space. Cayman has more than 700 captives domiciled locally, ranking 2nd only to Bermuda, which boasts more than 750.
Both countries have comparable requirements when it comes to capitalization, reporting requirements and applicable fees.
Make no mistake, Barbados has made great strides recently in restructuring their tax system to boost their competitiveness in the international market. With effect from January 1, 2019, the International Business Companies Act has been abolished and companies registered as captives pay a license fee and are zero taxed. Other insurance companies that insure and reinsure third-party risk are taxed at the minimal rate of 2%.There is, however, still a fair distance to cover when it comes to prioritizing international captive business. For personal and professional exposure to cutting-edge thinking about the global captive industry, it would be hard to equal the Cayman experience.
