The Paradise Papers story has named several famous people who have investments in Cayman. Once again the attitude seems to be that this investment strategy is shameful. That this some sort of clever manipulation of rules and regulations to avoid paying tax. Now, we won’t deny that there are tax advantages in the island’s fiscal policies, but we feel it’s time for a little less hysteria. It’s time for a grown-up conversation about global finance.
We’re not experts in the global finance and investment game – property’s our thing. But we do know that the islands are a globally recognised business and financial centre. Some of the world’s biggest corporations and banks have operations on Grand Cayman. We’re not talking about dodgy operations cleaning dirty money, we’re talking about legal and legitimate business practices.
We’re not naïve, we know that not everyone approves of these practices, we know they can cut tax bills. However these are also the approaches that improve the returns on investment, and in the global economy. That’s how things work – investors want the best results.
Where’s your money invested?
In the current name-and-shame climate, it’s easy to assume that these investors are exploiting their wealth to the detriment of the rest of us. But this is where it gets interesting – we are the investors. The truth is that even those of us with modest savings or a pension plan could well have money invested in a so-called tax haven. Finance is complex and it’s truly global. If you put money into a savings plan or pension, you expect and want fund managers to help your savings or pension pot grow. They will balance risk and reward, trade stocks and shared on international markets, purchase funds that are part of other funds. These funds could well be based in Grand Cayman or in Hong Kong or in Switzerland.
We’re not saying this is the way the world should be, we’re saying this is the way the world is. It’s complicated, and it will take much more than the release of the Paradise Papers to uncomplicate things.
When we help a banking sector employee find a condo for the duration of his stay, we get to know a person who’s studied for years and is working hard to make a living and support their family. We don’t see a tax-dodge wizard – we see professionalism and a responsible attitude. Our friends in the financial sector spend their earnings in Cayman, supporting our island economy. And if we looked closely enough, we might discover that that individual was also, in a small way, contributing to the success of a local start-up business or securing a decent standard of living for a retiree somewhere across the Atlantic.
Like we say, it’s complicated.
We’ll stick to property.