Exodus down to immigration, admits offshore firm
(CNS): The departure of financial firms from the Cayman Islands as well as the downsizing of some operations over the last year has generally been blamed on the global economic crisis. However, Roger Hanson, former regional manager for Fortis Prime Fund Solutions, has admitted that it was immigration issues that played a significant part in the firm’s downsizing on the island. Speaking to Reuters last week, Hanson said the company moved part of its operations to Curacao and downsized its people after failing to obtain the immigration flexibility it sought for staff.
He told the international news agency that, following Hurricane Ivan in September 2004, the company wanted to spread its risk. "We asked for two-to-three year permits for our staff to lower our risk. But we were not given them. So we said, fine. We can’t continue to build back our infrastructure and not have any certainty after making all that investment," Hanson added.
In the last year or so Goldman Sachs, HSBC, Citi, Rothschild Trust, Fortis, Butterfield Fulcrum Group, Caledonian Fund Services, Maples & Calder have moved part or all of their operations to other jurisdictions such as Canada, Ireland, UK, US, Bermuda and Curacao. While few have admitted openly to immigration limitations being the reason, in reality it appears to have played a significant part.
While the current United Democratic Party government has promised to offer greater flexibility to new investors, when it comes to work permits and key employee status, it has also announced dramatic increases to the cost of permits, the details of which are expected to be announced shortly. Permits across the board will be increasing by around 50% but some in the professional sector could increase by as much as 200%.
"As a jurisdiction, we cannot run the risk of making it too difficult to do business or increase costs," John Lewis of the local Fund Administrators Association told Reuters. "Once these companies have gone, they will never come back."
Government, however, is hoping that the fast-tracked three- to five-year work permits and assurances that senior positions in investing companies will get key employee status will encourage more new inward investment, despite the rising costs to do business in Cayman.
The goal, according to the head of the Immigration Review Team and UDP deputy chair Sherri Bodden-Cowan is firstly to stop the exodus and then seek new investment.
"First, you have to stabilize the companies that are already here and stop the haemorrhaging," Bodden-Cowan told Reuters. "Then we can talk about new business. We are looking at attracting fund managers, brokers, deal-makers who have a lot to say on where capital goes on creating funds.
Although Premier McKeeva Bush has appealed to the community to embrace the changes to immigration policies, there are many who remain firmly against what they see as offering more opportunity for foreigners to Caymanian status.
In contrast, there are still concerns from the offshore sector that decisions by the immigration boards regarding such decisions as key employees do not reflect the policy of government and are arbitrary and unpredictable.
With unemployment rising rapidly and more than 6% of people out of work, government is faced with the dilemma of wanting to encourage foreign investment but also deal with the local perceptions that foreigners are still being given the plumb jobs at the expense of Caymanians.
Category: Business
As we emerge from the recession wake up and realise it was not that bad. Our futures have been saved by massive measures taken by the US and European governments to save the banking system and hence prevent a wider depression.
For most of us, the vastmajority, not much happened. Yes we were less busy, yes we earned a little less but we were all expanding too fast in the years before and it probably did us all some good.
Very few people ended up genuinely unemployed and in Cayman Caymanian could get a job for the short term if they wanted, albeit it a lower paid one in a business not for them. That is what the unemployed do in a recession, although here it is even easier to find temporary income streams.
But the local hysteria has caused so much damage. The entrenchment of protectionism has scared off established businesses from Cayman. The refusal to offer any cut in public servant spending and use our offshore clients as a piggy bank will be remembered for years to come.
A little pain would have protected Cayman for the future, but a group child like reaction to negative events has instead down serious long term harm.
So these days have been terrible for Cayman. We might not appreciate it now, but the screams of a few nationalists and the interference of immigration has set in motion events that risk the future loss of many many more Caymanian jobs.
It is time for leadership, which to date has involved ill chosen fighting words and little sensible action. Offer existing business incentives to make long term plans before seeking new entrants. Cut the civil service by a good 20%-25%. Take some unpopular but necessary measures – that is what statesmen do. And maybe, just maybe, 10 years from now the job choices for young Caymanians will not be limited to bar tending or drug dealing.
Interesting conversation. The discussion highlights problems existing on Cayman and any other society where half the population is imported to address all kinds of labor shortages. The local population is threatened by the ex pats despite reaping huge benefits. The ex pat population is primarily interested in short term benefits (which is driven, in part, by restrictive immigration policies – if you can only stay two years how can you be expected to take a long term view).
I live on Curacao and can definitively state that the immigration policy is much more friendly to ex pats than that of Cayman. Could this be becasue Curacao’s pre-emminent position in the international financial services world has been taken over by the likes of Cayman? Is Curacao a leading indicator of what is currently occuring on Cayman?
I’m pleased to see the cracks developing in Cayman, budget shortages, increased fees, barriers to the ease of doing business. A great opportunity for those outside of Cayman! Thanks!
We are always hearing of the negative impact of immigration policy on these so call wonderful Companies and their financial experts that have incorporated themselves on these shores for sole benefit of Caymanians. My questions what about positive business Like Enron, BreX, Haliburton, Parmalatt, Bernie Madoff and to name a few more outstanding business that have made us the target of OECD and EU dissenters not to mention US president Obama and UK PM Gordon Brown that have threatened the Cayman Islands financial industry and its people who are depicted as Pariahs of the financial world. While they can depart these maligned shores and retire with their wealth the Caymanian people have to deal with these long term harmful effects. Who pays that price? As far other jurisdictions are concern aaaaaah let them try and get away with what they are doing here.
Thank you, Gordon
At least someone here is making sense!
Only the few understand what is really going on! Only a few are courageous to speak out and stand alone if all else fails!
If they can’t take the Immigration policies that protect Caymanians and these Islands, we, the people of Cayman, simply don’t need them…
lol…
THERE ARE MANY FISH IN THE SEA
Aparently not.
SO tell me what companies have come to Cayman since the departure of those listed.
That is your premise that the leaving companies will be replaced, so please give your evidence.
My friends, a brief review of history will demonstrate that the Immigration Law 2009 Revision is the most expat friendly/accomodating immigration law these islands have ever had.
There is evidence to suggest that business blossomed in Cayman when there were tighter immigration controls, which resulted in a smaller population, less crime, etc.
An alternative perspective may well be that there is an inverse correlation to liberalising immigration and business growth in Cayman.
what evidence?
By "alternative perspective" you must mean "a parallel universe".
At best you are confusing correlation with causation.
I believe there is a lot of confusing correlation with causation with respect to businesses leaving because of immigration issues. Some instances are deliberate.
Knowing some of the management who were involved in the downsizing decisions by these businesses, I can assure you that immigration problems were a more significant reason for the decisions than they will let on publicly. Businesses don’t like being told they have to get rid of good experienced staff. Funny that.
Oh i do hope ‘Johnny Cake wid a cup of coffey’ is reading this, as every time someone mentions the immigration issue as a cause for the exodus of financial firms from the island he lambasted the writer declaring that it had nothing to do with immigration and it was all a big consiparacy against the Caymanian people. Johnny, there is no conspiracy, Caymanian and expat are all in this together, business is business, race, colour or creed plays no part in the thinking of most mature well run financial firms.
We can’t make the country any cheaper to do business in (the politicians need their SUV’s, free flights and entourages!!) BUT we can make business easy to do here. This is how we will compete against Toronto, Dublin or Dubai. Good Caymanians and Good Expats in partnership together is a hard to beat combination. Making it impossible or exceptionally difficult to retain good expats is not a winning formula.
Please do not swallow everything that news sites print as often-times they are not following up on them. the following seems to make it clear that the immigration policies in Curacao are no "better" for business than ours!
http://www.unhcr.org/refworld/type,QUERYRESPONSE,,ANT,403dd1e10,0.html
Also check out the following article! Sounds like they have their share of Immigration problems to deal with in Curacao as well. All that glitters is not GOLD Mr Hanson. Perhaps you should tell the truth and stop making excuses!
http://www.smn-news.com/st-maarten-st-martin-news/3474-the-dutch-politicians-are-paranoid-says-duncan.html
And what of Toronto, Dubai, Dublin, London. New York and the many, many more locationswhere companies are locating for business?
You are so missing the point here!
I am not missing the point, Mr Hanson claims his Firm relocated due to our Immigration policies, however there is more to the story and he is only telling one side. Perhaps CIMA would like to offer their version as well so that we all know exactly what transpired!
Neither of these articles are in any way related to our immigration issues.
If you are Dutch or hold a EU passport you can live and work on both sides of St. Martin/Maarten.
We don’t have 40,000+ illegal immigrants in Cayman.
Obliviously a distressing article. I looked at the Reuters version and it was much worse than the CNS one. That being said let me point out that financial leaders have been warning of this for years. It not a failure of the present or just past governments buta reluctance over the last 30 years to not make a consummate effort to develop some form of immigration/ more importantly INTERGRATION system.
Caymanians must understand that they are taking away jobs from themselves and their children. By not encouraging relaxed immigration policies to entice business to come to Cayman they are essentially limiting their own opportunities.
On the issue of attracting fund managers – I have spoken to a few fund managers and others who work in the industry and the overwhelming majority prefer to stay in New York, London, and other international metropolitan cities. They vacation here but told me they said they would find it small and provincial. We lack the shopping, theater, concerts, and big city experience that these people want and are use to.
I think "small and provincial" is too kind. Isolated, backward and devoid of culture is more like it.
It’s probably time for you to go home to your own forward thinking, totally integrated and culturally diverse country!
Oh I will, once I have stashed enough cash. Only the money makes this place bearable.
Its people like you who have created the "immigration" issues we have here. Your ignorant, inbred attitide is what pushes Caymanians to seek to protect our birth right and our people. I hope the "cash" you are hoarding and stashing away lands you in a federal prison when your "government" discovers what you have been doing in the Cayman Islands all this time.
To be honest one of the main reasons why we expats come here is the money and where are we spending it? Here! I wonder what Cayman would be like if all expats would leave. I am sure many will say " It will be like paradise!" I am not too sure… but maybe its worth a try and we will all see whats happening. People.. WAKE UP and get out of your "happ world bubble" you are living in.
Did a Caymanian just call an ex-pat "in-bred"? Now that is amusing.
And I can assure you my cash has been stashed while I am working here for the last five years in a perfectly legal way. It is quite an impressive pile of money which is the only good thing about having to live in this isolated backward cultureless wasteland.
I am glad and sad at the same time that you admitted this and it goes to prove what many Caymanians think of us expats is correct. Caymanians, believe me, not all of us are like this low life. Many of us come here and we make money, yes, but we also contribute in many ways to the uplifting of your country.
It is very sad that these people are allowed to come here and say and do these things and want absolutely nothing from this country but to stash their money and leave. I would feel really terrible if expats in my country felt this way, so I cand emphatize. We expats are a privileged few because many of us would be unemployed now in our countries simply because of the worldwide recession. We should be grateful to the people and the businesses of these islands who continue to provide us with jobs and wages that we are able to "stash" some for a rainy day. Rather than saying these unkind words we should be helping to keep this economy going. Remember even if we get rolled over and have to go back to our country for a year, where in most cases it would be tough for us to find work, this country will welcome us back in a year. I doubt many of us could survive just on the savings that we made here for too long but then again I may be wrong but it certainly would be nice to return to these beautiful islands and it’s people once again.
Caymanians, on behalf of all good expats, I thank you for welcoming us into your community and I profusely apologize to you for these terrible remarks made by those people that come here only to rape your country and leave. They are in the minority and please don’t paint us all with the same brush.
Which Einstein, Frank? LOL
I do see the resemblance . . . .Maybe I can work Ezzard into the sequel, wielding his machete.
Roger Hanson who allegedly ran Fortis was never known for his diplomacy and talking to reuters as he has, does not help the island. Assuming he was making the applications to the Immigration Department for the permits I am unsurprised he did not get them.
I agree also with the previous post. We are unlikely to have fund administration back offices setting up here. It is just too expensive and in some cases the time zone is wrong.The best days have long gone and we need to realise this.
In the absence of any intelligence in government policy, the best days are definitely gone. The only hope is that people with vision, intelligence and the ability to get things done can replace the self-serving bunch of cronies, yes men and hangers-on currently enjoying first class travel around the world at our expense. Any bets that Mac is willing to have that happen?
Why take a swipe at the messenger whilst avoiding the issue he istalking about?
Hanson taking to Reuters is not the problem for the island. The islands policies about immigration is the problem for the island.
Focus on the problem, not the messenger who speaks up about it.
I agree totally with this comment. As I have posted several times, this country is only operating on a reactionary basis, not an anticipatory standpoint. The success of the Cayman Islands bred on Immigration, so why is it so difficult to come to a very good understanding with the immigration issues that these corporations faced why they have to close up operations and go elsewhere.
Let them go!
If they don’t want to comply for the sake of our people!
Let them go! Cayman is not depended onthem, or on any corporation!
I’m sure moving Operations, will not change some of the Immigration policies we have, which are there to protect the Caymanian people!
cayman is is fully dependent on expatriate labour… or maybe you want to go back to the fishing, rope making days….
No other seafaring nation on this planet developed rope making capabilities using locally available plant products.
Then Cayman will survive – we have the monopoly on locally produced rope.
Be sure that every horse and buggy gets equipped with it. We don’t need any expat support – the world is OURS!!!!
With all due respect, wrong, 09.55.
The ancient Egyptians were probably the first civilization to develop special rope making capabilities using locally available plant products and they too, were a seafaring nation. Egyptian rope dates back to 4000 to 3500 B.C. and was generally made of water reed fibers. Other rope in antiquity was made from the fibers of date palms, flax, grass, papyrus, leather or hair. Starting from approximately 2800 B.C., rope made of hemp fibers was in use in China. Rope and the craft of rope making spread throughout Asia, India, and Europe over the next several thousand years. In the Middle Ages (from the thirteenth century to the eighteenth century), from the British Isles to Italy. The earliest ropes in Britain were made from twisted strips of lime bark (Tilia spp.) and later from the Cannabis Sativa/Hemp plant. The unfortunate ‘Pete Marsh’, a body found in an ancient peat bog site in England, was strangled and bound with a knotted rope of Iron Age workmanship. The Incas of Peru slung rope-ways across chasms and kept trading accounts by means of knotted ropes. Ropes have traditionally been made from a range of natural fibres, such as cotton (Gossypium spp.), sisal (Agave sisalana), coir (Cocos nucifera), jute (Corchorus spp.), hemp (Cannabis sativus) and flax (Linum usitatissimum) all over the world long before Cayman picked up the tradition.
Let them go?
So who will employ the 30,000 Caymanians, when the offshore Companies have left?
The governent? they will have lost the majority of their income with the companies.
Thousands of Caymanians will have to leave Cayman to find work, and that will make them a dispised expat in what ever country they move to.
Tourism will die as the crime rate spirals.
Yes let them go!!
Post 14:31- I’d like to correct you on your ‘dispised expat’ comment. That attitude, for the most part, is specific to this island.
At least out of the other countries I have lived, this is the first that I have experienced it. And the first that I have experienced Racism as such.
Try Bermuda or BVI
blah blah blah blah blah
Say all you want about racism…
If you come into my house, you MUST follow my Rules!
🙂
Does that mean I should HATE you because we were not born in the same place?
Then don’t be surprised when your house ends up as a fallen down shack
But that really is the point. You need people to come to your house to keep it going, with the present rules people are only leaving.
If you want to have 30,000 Caymanians in Cayman, with 2,000 jobs available, and enough arable land to feed at most 5,000, then go ahead.
Actually – Cayman is VERY dependent on offshore business. You may want to think what will happen if they all pull out, investors won’t return somewhere if they feel they were treated unfairly or didn’t receive any co-operation for their billions of dollars they are working with. Whether you agree with that or not, that’s the way it works and sorry to tell you but right now they ARE leaving and taking their money too…
Yes you depend on them.. same as I depend on the expats in my home country but you are too small minded to realize it…. but as you always say "soon come"
Well…
They come here and think that they can undermined the native people of these Islands… Sorry, in any other country, it doesn’t work like that!
Get loss… another will just have to fill your place!
That is what you think now. When your way of thinking has really has taken its toll and no one wants to come here to our Island "to fill their place" you will see the TRUE POSITION! Then I would be great to hear what story you will have to make up to your children as to why GT is a ghost town. Expats have nothing to lose here…. Right?? Well guess what we have something to lose if we lose them. The sooner we all realize that we need to find BALANCE and have RESPECT is the sooner we will stabalize Cayman and have locals and expats back in harmony.
Balance and Respect.
AMEN!
‘get loss’…… sums it up i think…zzzzz
LOL class !
"another will just have to fill your place"
So we have lost or partly lost:
Goldman Sachs, HSBC, Citi, Rothschild Trust, Fortis, Butterfield Fulcrum Group, Caledonian Fund Services, Maples & Calder
And who have come in to replace them?
so much for another coming in to replace them then.
Ha ha
We have lost so many…
And so many have replace them…
Ah… Soooo
What is your point!!!
The point is no one has come in to replace those that have left.
And so many have replace them..
like who, please name some of the replacement companies you love to mention
Or do you lack any evidence in your point?
You won’t be so cocky when all the investors and finance professionals that are currently subsidising your laziness are not around. They’ll have left, taking their own jobs and many many more middle management and professional jobs filled by Caymanians, with them.
When your welfare money is cut and the bank forecloses on your house, think back to the good times.
Years of greed, incompetence and attitudes like this have led to the downfall. It’s becoming too late to stop it unless attitudes change.
Who do you honestly think is going to come in and replace the financial services companies leaving? Come on, be serious, no other industry is viable because of the same reasons, the cost of doing business and immigration problems. The only potential industries are those from times past like making rope and fishing, but I’m afraid these aren’t going to pay your mortgage or pay your bar tabs.
The breakdown in society is also harming tourism so don’t think you’ve got that to fall back on. The same greed and corruption has created a faceless tourist destination with no real attractions, no culture, no beauty and very high pricing.
I would start by taking yourself back to school, learning basic English, then maybe (if your inadequate mind can handle it) take a course in business or economics. Then maybe your comments may make more sense.
The entire globe-trotting attempt to attract new business here is flawed.
Cayman has to focus on an protect its core businesses, namely core banking services, fund administration, trust management, legal and accounting services. These are being hammered by increased fees and immigration restrictions (and yes, roll-over is critical to that).
The idea that fund managers are going to move here is utterly naive. Cayman just offers so little to these groups and is simply to far away from the action that it is wholly impractical. One or two might come, but the list of firms who have had enough of Cayman’s mistreatment listed in the article – Goldman Sachs, HSBC, Citi, Rothschild Trust, Fortis, Butterfield Fulcrum Group, Caledonian Fund Services, Maples & Calder speaks volumes.
I’m looking forward to all the poisonous "shake the sand from your feet/hope the airplane door hits you on the way out stuff" from our xenophobic Einsteins on this site. The rot is well under way;what this type of report is not covering is the number of small companies who are quietly closing their doors. Only a few Caymanians have been affected so far and the ever expanding civil service can probably absorb them but the medium/long term looks dire unless MANY things change here. Most of us think they wont because it is the attiude of these Einsteins that is killing Cayman just as surely as the gunmen.
Asa Caymanian I wish I could apologize for all of the local Einstein’s and have that be the solution to this critical situation. Unfortunately SOME of the local Einstein’s simply don't see that Cayman is what it is because of both Expats & Locals working together. Nor do they see or have the ability to appreciate the full extent of role of Expats play in our economy. We must all recognize that the Expats brought their jobs here!!!. They started business other than fishing, and turtling. If expats leave with their business so do the jobs!!! Furthermore, if they leave the money they spend daily on Island stops too which means that is one less mouth for us to feed and make an honest dollar. And NO Expats are not GOD but they should be treated with RESPECT and likewise the expat Einstein’s should not be self-righteous. Fair is fair. Let’s talk solutions for the future not blame of the past!Awesome post!!!