It is called a paradise for capital and a paradise for tax avoidance, and many companies all over the world are registered here.
So what exactly is this island like and how did it become a tax haven?
When you open the map of the world, you have to look very carefully to find that the Cayman Islands is located in the Caribbean Sea in North America.
Administratively, it is an overseas dependency of Britain, and the whole Cayman Islands consists of three islands: Grand Cayman, little cayman and Cayman Brac.
Among them, Grand Cayman has the largest area, with 220 square kilometers, and is called the main island. The other two islands are much smaller, with only 23 square kilometers and 16 square kilometers respectively.
Cayman Islands has a flat terrain, and most of the islands are plains with a tropical climate, with an average annual temperature of 24-30℃.
It is not only the fifth largest financial center and a famous tax haven in the world, but also a world-famous tourist attraction. In particular, its warm water temperature and extremely clear seawater, coupled with numerous diving spots, attract diving enthusiasts all over the world.
As an island with finance and tourism as its pillar industries, the population of Cayman Islands is not very large, with only about 65,000 people.
However, its economy is very developed, and its per capita GDP has reached nearly 60 thousand dollars.
Of course, this is mainly due to its preferential policy of no foreign exchange restrictions and direct taxes, which has attracted many large companies from all over the world to engage in financial business on the island.
Why did the Cayman Islands choose this development path?
This is related to its history!
As an archipelago far from the mainland, Cayman Islands was discovered on May 1503 during Columbus' fourth expedition to the New World.
At first, it was named Turtle Island, and it was not until several decades later that the British navigator Francis Drake arrived at the island that it was renamed Cayman Islands.
Later, together with Jamaica, it became a British overseas colony under the jurisdiction of the Governor of Jamaica.
1962 After Jamaica's independence, the Cayman Islands became a colony directly under the British crown.
From then on, the Cayman Islands began to take off.
There is a lack of resources, and there is no formed agriculture and industry. Although there are a lot of seafood, such as sharks, lobsters and shells, these are not particularly competitive.
At the beginning, this used to be a paradise for pirates, and they hid their plundered wealth here. Now its nature remains unchanged, and the rich evade taxes here.
In the 1960s, a large-scale independence movement broke out in the Bahamas, which affected the money laundering activities of criminal gangs in the United States, and they had to find new locations.
The loose policies and suitable geographical location of Cayman Islands have come into their sight.
1972, the Cayman Islands promulgated a new law, which stipulated that non-residents should be exempted from taxes and only receive indirect taxes.
Under this law, the company's personal property and operating income are not subject to tax, and the name of a tax haven is therefore named.
According to statistics, 49 of the world's top 50 banks have branches in the Cayman Islands, and the total number of financial institutions such as trust and insurance exceeds 1 1,000.
There are more than 50,000 large companies registered on the island, and the total scale of hedge funds registered by these companies in the Cayman Islands exceeds 2.3 trillion US dollars, ranking first in the world.
This does not include those small companies that come here to register.
In a five-story building in Georgetown, the capital of Cayman Islands, it is said that more than 65,438+00,000 new companies are registered here every year.
This is due to the policy that companies in Cayman Islands do not need to pay taxes, but only need to pay some management fees every year. Therefore, both international giants and shell companies are eager for this.
Those foreign giants we are familiar with, such as Apple, Microsoft, Facebook, Google and other international giants, are also registered here.
In fact, in addition to the Cayman Islands, the Virgin Islands and Bermuda in the Caribbean also have policies that do not require tax payment.
Why can the Cayman Islands stand out from many competitors and become the most influential tax haven?
Apart from the well-known tax exemption policy, there are several very important reasons why the Cayman Islands can attract companies from all over the world to register here.
First of all, the confidentiality of Cayman Islands is very good!
In addition, under the protection of Britain, the political situation in the Cayman Islands is quite stable. Therefore, many people regard this as the best choice for tax evasion and money laundering, and there is almost no need to worry about their information being exposed.
Secondly, the procedure of registering a company in Cayman Islands is very simple!
It's basically the same as our personal account in the bank. Just fill in some basic information.
The third is to facilitate listing!
Many companies all over the world, especially high-tech enterprises, want to go public on NASDAQ.
Because there are not many requirements for listing on Nasdaq, even if the company is not profitable, it can pass, but registering a company in the United States is not only cumbersome, but also requires a lot of taxes.
Therefore, registering a company in the Cayman Islands has become a curved road for many companies to go public.
Moreover, as the Cayman Islands is a British territory with high international recognition, companies registered in the Cayman Islands can also be directly listed on major city exchanges such as Singapore, Hong Kong and London.
Moreover, through the tax exemption policy in Cayman Islands, many companies will use the shell companies registered here to hide their actual profits, thus achieving the effect of tax avoidance.
The Cayman Islands will not only stop this kind of behavior, but also provide many conveniences and even provide illegal tax evasion and money laundering services directly.
This is why it has the title of "tax evasion paradise", which makes many companies registered here earn a lot of money.
Nowadays, it is very common for domestic companies to register or set up subsidiaries in Cayman Islands.
In addition to tax avoidance and foreign exchange control, capital flow is more convenient.
Moreover, some local governments have preferential policies for introducing foreign capital, which normal domestic enterprises cannot enjoy.
It is also a very clever way of speculation to register a company in Cayman Islands, set up a layer of foreign capital and then return to China for investment.
Is there no harm in talking so much about the advantages of registering a company in Cayman Islands?
Actually, there is!
Most importantly, it will weaken the people's national identity with the brand.
For example, South Korea's Samsung Company, which wanted to register a subsidiary in the Cayman Islands, was strongly opposed and protested by the Korean people and finally had to withdraw to South Korea.
Germany and Japan are also very disgusted with this. So far, no large companies have registered in the Cayman Islands.
With the change of domestic national brand awareness and the increasingly open and transparent enterprise information.
China people are also dissatisfied with this behavior of making money in the domestic market but avoiding taxes abroad.
Even in the United States, companies registered in the Cayman Islands have been frequently investigated and sanctioned in recent years.