It is time for the true function of the Cayman Islands to be more widely acknowledged and better understood, according to Neal Lomax, Cayman Managing Partner at law firm Mourant Ozannes.

Mr. Lomax made his remarks at the inaugural Cayman Alternative Investment Summit, held at the Ritz Carlton over two days at the beginning of November.  Mourant Ozannes was a platinum sponsor of the event, which attracted powerful keynote speakers including former US President George W Bush and global entrepreneur, Sir Richard Branson.

Influential business leaders, strategic thinkers and investment specialists came to Cayman for the conference. As one of the co-chairs of the event Mr. Lomax told the audience that like most members of the Cayman Islands financial services community, he was no longer surprised, but nonetheless continually disappointed, by the failure of some journalists and commentators to carry out even the most basic research and fact-checking before publishing articles about Cayman. Mr. Lomax noted that the truth of the matter is that Cayman is at the forefront of shaping international standards for tax transparency. The jurisdiction has had stringent anti-money laundering legislation in place for many years and is committed to supporting global efforts to fight financial crime.

Mr. Lomax noted further that international financial centres like Cayman operate to access and pool capital from the international capital markets for reinvestment in onshore markets through the mechanisms of alternative investment funds, structured finance or reinsurance vehicles. Cayman provides a tax-neutral platform from which trillions of dollars move from international capital markets to the balance sheets of onshore financial institutions. Cayman also helps domestic and foreign investors in developing countries access the kind of efficient institutions that are necessary to drive growth but which are often unavailable locally. The concern is sometimes raised that international financial centres like Cayman may erode tax collections, divert economic activity, and otherwise burden nearby high-tax countries. However, a large body of economic research over the last 15 years has considered these issues and reached a very different conclusion. The essential feature of the offshore structure is that it does not add an additional layer of taxation which removes wealth and productivity from an economy. An alternative investment fund may be established in Cayman so that no tax is charged at the fund level. However, investors will still be subject to tax in their own jurisdictions on any increase in the value of their investments. Similarly, the investment manager, usually based in a major financial centre, will pay tax on the fees that it receives for managing the fund. Cayman has provided, and continues to provide, significant benefit to the global economy and does so in a manner that is well-regulated and in accordance with the highest standards of transparency.

Speaking after the conference, Mr. Lomax said: ‘We are very proud to have been a major sponsor of this event which attracted some of the leading names from the alternative investment industry. The feedback we have received from attendees about the summit organization, content and venue has been overwhelmingly positive.’