Money, Banking and Taxes

Cayman's Currency

The official currency of the Cayman Islands is the CI dollar (KYD). The exchange rate is tied to the US dollar with CI$1 being equivalent to US$1.25.

CI$1     =          US$1.25
CI$5     =          US$6.25
CI$10   =          US$12.50
CI$25   =          US$31.25
CI$100 =          US$125

US$1     =         CI$0.80
US$5     =         CI$4
US$10   =         CI$8
US$50   =         CI$40
US$100 =         CI$80

If you want to compare the value of CI$ with the currency you are familiar with then use the currency converter in the top right hand corner of this website and the following table will show you the conversion:

CI dollars are issued in denominations of $1, $5, $10, $25, $50 and $100. US dollars are also widely accepted but you will probably receive change in KYD. Most stores, restaurants and resorts accept credit cards but do check first. Credit cards are always charged in US$.

ATMs can be found throughout the islands at all bank branches and also at major supermarkets. Be aware that in Little Cayman there is just one bank and it is not open every day so make sure you have enough cash to see you through.

Taxes

A government tourist tax of 10% will be added to your hotel bill unless you can prove you are a Cayman resident. Some hotels may also add a gratuity charge. There is no sales tax.

Tipping

If gratuities are not already included, it is customary to tip approximately 15% for good service and more if you were really impressed.

Cayman Banks

Regulated by the Cayman Islands Monetary Authority (CIMA), banking in the Cayman Islands is a major part of Cayman’s financial sector, with 123 banks (October 2020) licensed.

The total international (cross-border positions in all currency and domestic positions in foreign currency) assets and liabilities were reported as US$663 billion and US$662 billion respectively in December 2019. Cayman is ranked 14th internationally in terms of cross-border assets and also 13th for cross-border liabilities. The majority of these banks are branches, subsidiaries and affiliates of established international financial institutions conducting business in the international markets. More than 80% of those international assets represent inter-bank bookings between onshore banks and their branches, subsidiaries, affiliates and other Cayman Islands’ licensed banks. A testament to the worldwide recognition of the quality of Cayman’s financial industry is the fact that over 40 of the world’s top 50 banks hold licences in Cayman. The banking sector hires highly skilled professionals and is one of the most prominent employers on the Island. Cayman Islands’ banks are bound by strict antimoney laundering laws, which together with Know-Your-Customer (KYC) regulations, are recognised as meeting or exceeding those of all major onshore jurisdictions.

The 123 banks licensed in Cayman are split into A and B classes, with the former licence permitting banks to carry out local and international business. There are currently 9 Class A licensed banks in the Cayman Islands, with six of those carrying out retail services. The other 114 banks hold Class B licences and are mainly restricted to offshore transactions with non-residents. Of the 123 banks licensed in Cayman in the second quarter of 2020, 20 are from Europe, 21 from the USA, 21 from the Caribbean and Central America, 19 from Asia and Australia, 13 from Canada and Mexico, 27 from South America and two from the Middle East and Africa. To see a list of the banks licensed in the Cayman Islands visit www.cima.ky.

Taxation

It has been suggested unofficially, that a tax haven is somewhere that has little or no taxation, protects personal financial information through laws blocking the sharing of information and exhibits an obvious lack of transparency. Although the Cayman Islands are often referred to as a ‘tax haven’, this does not mean it is an uncooperative jurisdiction with regards to tax matters or other criminal matters. 

Indeed, the Cayman Islands have been making large efforts to be transparent and to sign laws that benefit foreign governments in the sharing of information and this has paid dividends. In 2000, the Cayman Islands Government signed up to the OECD’s project to eliminate harmful tax practices and join the Global Forum on Taxation. In 2001, as a demonstration of the OECD commitment, the Cayman Islands signed a tax information exchange agreement with the US which is in force for all civil and criminal matters. A few years later, the Cayman Islands agreed to implement the European Union Savings Directive, automatically reporting bilaterally to each of the 27 EU member states the interest income earned by EU citizens in Cayman Islands bank accounts.

Since then the Cayman Islands have also signed numerous tax information exchange agreements with G-20 and/or OECD countries modelled on the OECD standard for bilateral tax information exchange and continues to actively negotiate additional agreements. Furthermore, the Cayman Islands has pioneered a unilateral mechanism, which provides for precisely the same range of tax information exchange in relation to tax information matters without a bilateral treaty and thereby provides access to a further 22 countries including the United Kingdom, Japan, India, South Africa and Germany among others.

The willingness of the Cayman Islands to be an open and cooperative jurisdiction resulting in it being added to the OECD ‘white list’ perhaps demonstrates that the label ‘tax haven’ is somewhat outdated and simply unfair. The professional service providers based in the Cayman Islands prefer (in recognition of the efforts undertaken) that a modern term of being a ‘tax neutral jurisdiction’ be used.

These efforts on the part of the Cayman Islands have been rewarded by an increase in transactional flows; this is no doubt because of the institutional business which was attracted to the Cayman Islands as a result of its tax neutrality and its improved reputation internationally as a cooperative financial jurisdiction.