Cayman Islands

The Cayman Islands exist because turtles used to nest here—and because capital always finds the path of least resistance. Christopher Columbus sighted these three limestone islands on May 10, 1503, naming them Las Tortugas for the sea turtles swimming in surrounding waters. By 1530 the name shifted to Caymanes, from the Carib word for the crocodiles also abundant here. For centuries, Caymanian turtlers harvested the creatures that gave the islands their name until populations collapsed and they had to sail to other waters. As late as the 1950s, a British government report listed the main export as 'seamen'—the remittances of sailors working abroad were the economy's mainstay.

The transformation came suddenly. In 1953, Grand Cayman opened its first airfield, first hospital, and first commercial bank—Barclays. Hotels followed, then Bob Soto's pioneering dive center in 1957. But the decisive move was legislative: Cayman enacted laws designed to exploit its historical absence of taxation. The islands had never levied income tax, capital gains tax, or wealth tax—legend credits King George III with granting tax exemption after locals rescued shipwreck survivors in 1794, though no documentation exists. What matters is that by the 1960s, this British dependency had found its ecological niche.

When Jamaica declared independence in 1962, Caymanians voted to revert to direct British rule rather than join the new nation. This was the critical choice: remaining a British Overseas Territory guaranteed the political stability and legal credibility that offshore finance requires. The Crown handles defense and foreign relations; Cayman handles everything else, including the regulations that make it attractive to move money here. By 1972, a new constitution granted near-complete domestic autonomy, and Cayman could decline British aid—the financial industry had made it rich.

Today, these islands of 69,000 people host more registered companies than residents—over 100,000. The financial services sector accounts for roughly one-third of GDP. The Cayman Islands are home to 85% of the world's hedge funds and manage approximately 75% of global hedge fund assets, holding nearly $7 trillion in deposits. By the end of 2024, 697 international insurance companies were based here, writing $41 billion in premiums and holding $153 billion in assets. Branches of 40 of the world's 50 largest banks operate from George Town. GDP per capita reached $86,689 (PPP) in 2024—among the highest on Earth.

The cost of this success is perpetual legitimacy management. The Cayman Islands spent years on regulatory grey lists: removed from the Financial Action Task Force's 'increased monitoring' list in October 2023, and from the EU Anti-Money Laundering list in January 2024. The jurisdiction continuously demonstrates compliance with international standards, most recently through the Virtual Asset (Service Providers) regime taking effect in April 2025, licensing cryptocurrency trading platforms and custodians. This is the tax haven's eternal balancing act: remain attractive enough for capital flight while respectable enough to avoid sanctions.

By 2026, Cayman will likely expand further into digital assets and tokenized funds, responding to client demand for new asset classes while maintaining the regulatory credibility that distinguishes it from less stable havens. The British Overseas Territory status remains the anchor—without the implicit guarantee of UK legal institutions, Cayman would be just another Caribbean island. But as long as capital seeks to minimize friction, and as long as the UK benefits from the arrangement, these former turtle-fishing islands will remain what they became: a place where money goes to avoid accountability.