The Cayman Islands has steadily diversified its economy over recent decades, which includes the creation of a special economic zone (SEZ).
The SEZ was set up by Cayman Enterprise City (CEC) in 2012 to attract international business, foster economic growth and promote technological innovation.
But what exactly is an SEZ and how does it work? Here, we take a closer look.
A special economic zone
A SEZ is an economic microcosm, where business and trade laws differ from those that apply to the rest of the country.
While the specifics may vary by country and context, SEZs generally share several core characteristics:
- Separate regulatory framework: SEZs operate under their own business, taxation and labour laws
- Geographical boundaries: The zones vary in size but are geographically mapped out
- Incentives for investors who are physically located within the zone: Typical benefits include tax holidays, customs duty exemptions and simplified administrative procedures
- Infrastructure support: SEZs often boast modern infrastructure, logistical facilities and connectivity to international markets
According to UNCTAD, there are now over 6,000 SEZs around the world, located in nearly 150 countries.
Cayman’s special economic zone
The Cayman Islands has one SEZ, which is supported by government legislation, and operates within CEC to ensure businesses have a genuine physical presence on the islands.
Firms that become part of Cayman’s SEZ benefit from fast-track business licensing and a quick five-day visa process, as well as professional corporate relocation services.
They can also gain access to a global network of professionals, making it easier to make connections and secure resources for growth.
There are three zones within CEC’s SEZ covering different industries – Cayman Tech City, Cayman Commodities and Derivatives City and Cayman Maritime and Aviation City.
CEC accepts companies in the following sectors: internet and technology, media and Marketing (including digital, media, film and broadcasting), commodities and derivatives (including fund managers, investment managers, virtual asset traders, and prop traders), biotechnology, life sciences and green technology.
Cayman’s SEZ started with 11 firms and now has more than 300.
Last year CEC opened its new George Town purpose-built campus providing turn-key ready office space for its clients.
Benefits according to Cayman Enterprise City
Cayman Independent asked the team at CEC what they believe are the main benefits of SEZs and CEC’s SEZ specifically.
On the benefits of SEZs generally, a spokesperson said: “Special Economic Zones (SEZs) offer global businesses the opportunity to operate from tax-neutral, first-world jurisdictions that are strategically located and supported by pro-business legislation.
“They help reduce bureaucracy, lower costs, and create an efficient path for companies to establish a physical presence while contributing to local economic growth.”
On the benefits of CEC specifically, they added: “Cayman Enterprise City is an award-winning SEZ uniquely underpinned by dedicated legislation, offering fully transparent benefits and concessions.
“Companies that set up in CEC enjoy 100% foreign ownership, zero corporate or personal income tax, renewable five-year residency certificates for employees and their dependents, and a fast-track business set-up process within four to six weeks.
“Beyond the concessions, members become part of a vibrant community with access to more than 150 networking and community events annually.” More information on CEC and its SEZ can be found here.
