By Emma Parker
In recent years, the Cayman Islands has gained a name for itself as a global hub for innovation and technology businesses, from start-ups and mid-sized enterprises, to major international corporations that run their operations from the Islands.
The range of technology businesses in the Cayman Islands’ innovation sector is diverse and includes e-commerce, blockchain, fintech, biotech, digital marketing, software development, programming, data services, aviation innovation, hosting, telecommunications, electronic publishing companies and more.
Why Cayman for innovation business?
Cayman’s emergence as a hub for technology and innovation business has partially been driven by a less location-centric global economy, “work from anywhere” trends, and the onset of COVID-19, which has caused most businesses globally to rethink their operations and to operate within more virtual and flexible parameters.
Matt Vaughan is the founder of Fetch Tech SEZC, a company based in the Cayman Islands that provides strategic and commercial support to venture-backed growth technology companies, and he sits on the steering committee for Digital Cayman. Expanding on why Cayman is so attractive to technology companies, he said: “Cayman has a unique offering for innovation businesses and their leadership teams. Very few countries, states or cities can compete with the global launchpad that Cayman has to offer.
“Not only is Cayman a safe and sophisticated jurisdiction with an unparalleled lifestyle, infrastructure and business-friendly regime when it comes to taxation, but we also have the advantage of close proximity to the US markets. For those that want the unique lifestyle that Cayman delivers but easy access to the US market – in terms of time zone, proximity and ease of travel – Cayman is the perfect location.”
Vaughan goes on to talk about a trend of “dispersal” in the tech sector globally and explains that the idea of innovation business only being situated in a small number of geographic hubs, such as Silicon Valley, is outdated. “Many innovative businesses, even before the emergence of COVID, were realising that they didn’t need to sit solely in a particular place to work effectively.” He explains: “Even within the USA, there has been a noticeable trend in recent years of tech businesses spreading out from Silicon Valley to set up hubs in places like Austin, Texas, or along the East Coast, such as Boston, New York and Miami. This pandemic has really accelerated this trend, with the Cayman Islands increasingly seen as a fantastic option to operate and for global technology businesses to establish presence.”
It isn’t just about dispersal or diversification, however. Cayman’s rise has also come about as a result of the strong and business-friendly foundations that Cayman has offered for many years, particularly to those in the financial services sector.
Richard Munden, a partner with Carey Olsen law firm in the Cayman Islands, observes: “Cayman’s unique tax position is undoubtedly a draw in that there are no corporate, income, capital gains, withholding or similar taxes with which a tech company need be concerned. Other advantages include a flexible corporate law framework and the ability to set up a form of legal entity to conduct the business that has governance and other characteristics similar to the types of entities with which investors and principals will be familiar in other jurisdictions. The fact that Cayman also boasts a long-established reputation as an investment funds hub, and as such is already a known commodity to many investors, may also facilitate the funding of entities based here. There is also a large and sophisticated base of legal, accountancy, corporate and other service providers available to assist new and growing companies.”
Charlie Kirkconnell is the CEO of Cayman Enterprise City (CEC) which, since it launched in Cayman in 2011, has attracted over 250 businesses of all sizes from more than 20 countries around the world to set up a genuine physical presence in the Cayman Islands. Approximately 70% of those businesses operate from within the Cayman Tech City Zone.
CEC is focused on attracting business to Cayman in three special economic zones (SEZs) and offers bundled business concessions which include: fast-tracked business set-up, renewable work / residency visas issued within five working days and turnkey serviced office solutions. When it comes to technology and innovation business, Kirkconnell explains what is helping put Cayman on the map: “The attributes that have made the Cayman Islands enticing to the financial services sector have also attracted some of the world’s top technology entrepreneurs and leading blockchain and fintech businesses to set up a physical presence in Cayman Tech City. Cayman’s robust regulatory environment, transparent and predictable legal system, abundance of on-island talent and cosmopolitan island setting have made Cayman the perfect place to set up your business.
“Our pro-business jurisdiction welcomes individuals from all over the world —Cayman’s forward-thinking government has developed excellent special economic zone concessions and strong intellectual property rights protections to encourage innovative technology businesses to establish a presence in the Cayman Islands.”
Jennifer McCarthy is in operations and business development with TechCayman, which was formed to develop a thriving tech industry and culture in the Cayman Islands.
McCarthy explains: “TechCayman is a business enabler. We help global technology players who wish to relocate or expand to Cayman. TechCayman operates as a portal through which companies operate, and by working with TechCayman they enjoy access to a range of advantages specific to this network. Our aim is to support the relocation of a small number of significant technology companies with a large footprint to Cayman each year.
“We see the development of Cayman’s stringent IP laws as being a key factor for attracting established technology players – who see that they can create, innovate and bank their IP here with absolute certainty. This has really taken Cayman to the next level. In addition, Cayman’s anti-patent trolling laws have been key and this protection is not available in many other jurisdictions. Of course, the lifestyle is also a big pull – for many Gen Zs and millennials it often comes down to the experience and lifestyle Cayman can offer.”
The TechCayman client services team works with international technology companies who wish to relocate to the Cayman Islands and avail themselves of the advantages specific to TechCayman’s ‘Sponsored Enterprises’ designation. The TechCayman team works closely with these Sponsored Enterprises to ensure each step of the relocation process is seamless, making sure that the companies and their employees have friendly, familiar faces waiting for them when they arrive in the Cayman Islands.
Cayman’s digital community
Cayman’s success in attracting technology business and entrepreneurs has also led to the development of a community of expertise, knowledge and innovation. The establishment of industry sector groups such as Digital Cayman and the Cayman Islands Blockchain Association are making the jurisdiction even more robust and are helping to drive Cayman’s tech sector forward.
The contributions of Cayman’s tech community are opening up opportunities for the youth of Cayman and helping deliver the workforce of the future. McCarthy says: “In the fall of 2019 we started 345Robotics, utilising the VexIQ curriculum format, and sought out underserved children from the public school system. In 2020 we also partnered with Cayman’s Acts of Random Kindness (ARK) initiative and invited children from their after-school mentorship programme to get involved. The results of this have been amazing – and to see so many children who face multiple challenges in their young lives have their ‘aha’ moments after building and programming a robot, or writing their first code, has been immeasurably rewarding for the team of volunteer engineers who lead the programme.
“We are also proud sponsors of Code (Cayman), a local non-profit dedicated to supporting the growth of the local tech industry by making technology programmes available, free of charge, to everyone. We believe that technology and innovation will become one of the main pillars of the Cayman Islands’ strong economy over the coming years, alongside financial services and tourism, and we see the technology sector providing valuable and sustainable opportunities for our home-grown Caymanian talent.”
Kirkconnell adds that: “Innovators, entrepreneurs and global business leaders want to be a part of a vibrant, cutting-edge ecosystem and the local tech community that we have helped build has essentially become an attraction in and of itself.”
Moving forward Kirkconnell expects digital and technology development businesses will continue to account for 70% of CECs growth and he sees signs that medical technology (MedTech) and regulatory technology (RegTech) businesses could join blockchain development as significant drivers of growth in those categories.
Virtual asset hub
When talking about technology and innovation in 2021, it is necessary to touch on the ever-expanding virtual asset sector. Cayman has also been working earnestly over the past year on its new Virtual Assets Service Providers Law (the VASP Law) to ensure that Cayman is well-positioned to both attract and retain fintech business to the Islands.
Kirkconnell comments that: “Businesses interested in setting up in Cayman value ‘right-sized’ yet robust legislative and regulatory regimes. We therefore think that the further emergence of expertise in the virtual asset space in Cayman will make the jurisdiction even more attractive.”
Munden adds: “The implementation of regulation in Cayman signals that Cayman welcomes virtual asset business and is committed to developing a framework to assess and govern the sector for the foreseeable future. The framework itself, while new, has many similarities to the framework for regulating other types of financial business and as such we would expect the government to have the requisite knowhow to introduce the new legislation in a relatively seamless manner. The VASP Law includes the concept of a ‘sandbox’ license which is intended to permit the development of innovative virtual asset services in the jurisdiction. We think this will prove attractive.”
Activity in Cayman in the virtual asset space is being born out in the market, according to Munden: “The most common virtual asset service business we are seeing establishing in Cayman is related to the creation of exchanges and or provision of custodial services for virtual assets. We have also continued to receive inquiries from clients looking to set up initial coin or token offerings which may now fall under the new VASP regime.”
More than a business hub
Cayman’s advantages also extend to the individual entrepreneurs behind these technology businesses, and Cayman’s many attractions have not gone unnoticed. Vaughan states that: “With the momentum we are now seeing for home working, distributed workforces and work-from-anywhere models there are a wider range of businesses and entrepreneurs moving to Cayman – which can also bring about tax advantages for those individuals, such as in the event of an eventual business exit.”
“The lifestyle and sophistication that Cayman offers is not something that can be found in other offshore centres and appeals to many entrepreneurs. Whether it is the availability of high-quality healthcare, world-class schools and educational facilities or high-end restaurants, spas, gyms, boating, golf, fishing and waterfront properties on a Caribbean island, Cayman ticks a lot of boxes.”
McCarthy also cites Cayman’s impressive response to the global pandemic as a real pull over the last few months. “People are coming to us and saying, we want to be there – it’s the safest place on earth. Our clients really appreciate the stringency of Cayman’s approach to COVID-19 and are happy to come in and quarantine here with the knowledge that after their quarantine period they will be free to live normally. We have had no community spread of COVID in Cayman for many months and live completely mask-free and with virtually no restrictions other than carefully monitored quarantine protocols for returning travellers.”
Sue Nickason, vice president of real estate marketing and sales at Dart comments: “Cayman is a very compelling place to purchase property; there are no restrictions on foreign ownership of property, no property taxes, no alien landholding licenses and we have access to a range of desirable properties, from turnkey beachfront condos on beautiful Seven Mile Beach to luxurious private homes and estates. In addition, people who invest a minimum US$1.2 million in developed property can qualify for a residency certificate in this British Overseas Territory. Following COVID, permanent residency status is becoming increasingly important to globally mobile individuals.”
“Our team at Provenance Properties can assist with everything you need to make a move to Cayman, including relocation advice on topics such as healthcare, education, pets, fitness and more, proprietary market data and introductions to local service providers and professionals who can assist with your move.”
If you are looking for commercial space for a business or new venture in Cayman, Dart Real Estate’s commercial leasing team manages over 800,000 square feet of Class-A and Class-B office, retail and commercial space in strategic locations across the Cayman Islands. Dart’s flagship development at Camana Bay is located right at the heart of everything and is one of Cayman’s most prestigious business locations. Dart Real Estate has also recently launched readyspaces at Regatta Office Park on Grand Cayman; flexible, turnkey office space that’s move-in ready from US$1,500 per month. Dart’s newest project, 60 Nexus Way, is now pre-leasing at Camana Bay and will welcome new tenants in 2022.
Are you interested in the Cayman Islands, but not sure where to start?
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About the author
Emma Parker has worked with Dart since 2019 and has been writing professionally since 1999. Emma graduated from the University of Manchester with a BA (Hons) in 1997, has a post-graduate Diploma in Communications, Advertising and Marketing and a STEP Certificate in International Trust Management. She has worked in PR, marketing and business development roles, primarily in the legal and financial services sector, since 2001. Emma is the founder of Sidekick, a financial services marketing and business development consultancy. She was raised in the UK and has lived and worked in the Caribbean in the British Virgin Islands and the Cayman Islands for over 13 years. Emma has a passion for exotic travel, her family and Newcastle United Football Club.