Weighing Up Residency By Investment In The Cayman Islands
The Cayman Islands enjoys a certain cache to foreign real estate investors as it’s renowned for being spoiled for choice with luxurious beachfront condos, expansive canal front residences and picturesque oceanfront villas.
Not only that, but this British Overseas Territory also provides investors the benefits of owning property in a tax-neutral jurisdiction, the reassurance of acquiring real estate in an economically and politically stable jurisdiction and the conveniences afforded by modern infrastructure at the same time.
If that isn’t enough of a draw, the Islands offer miles of white sandy beaches, year-round tropical sunshine, a low crime rate and a high standard of living with state-of-the-art medical services and specialties found nowhere else in the Caribbean.
For real estate investors, there are two residency by investment in real estate options available to those looking to relocate to the Cayman Islands:
Certificate of Permanent Residency for Persons of Independent Means
This programme requires a minimum investment of US$2.4 million in developed real estate to allow the property holder (and any qualifying dependents) to apply for naturalization (with no expiry date) after a five-year period (providing other residency criteria have been met). Naturalisation entitles the permit holder to a British Overseas Territories (Cayman Islands) passport and enables them to apply to register as a full British citizen and obtain a British passport. In taking this up, there is no obligation to surrender any existing citizenships.
Lastly, the permit also allows the holder or spouse to apply for a variation to the Certificate to obtain the right to work in the local economy.
Residency Certificate for Persons of Independent Means
This permit is a less expensive option and has been designed for investors not looking to obtain Caymanian citizenship or gain the rights to work in the Islands. It is valid for a period of 25 years (if they spend a minimum of 30 days in aggregate in any calendar year), with the option to renew for a further 25-year period.
In order to qualify, the candidate must have invested US$1.2 million in developed real estate and have a minimum ongoing annual income of US$144,472 – without having to seek work in Cayman. Alternatively, they can open a local bank account with a minimum deposit of approximately US$500,000 in continuous assets. This programme particularly appeals to high-net-worth individuals who seek to earn residency status in a tax-neutral jurisdiction and the “value for money” which the Cayman Islands offers for those who reside there – even on a part-time basis.
Cayman Islands RBI option for real estate investors (source)
| Certificate of Permanent Residency for Persons of Independent Means (Cayman) | Residency Certificate for Persons of Independent Means (Cayman) | |
| Min. investment in real estate required | US$2.4 million in developed real estate | US$1.2 million in developed real estate |
| Are there restrictions on foreign ownership? | No | No |
| Are Alien Landholding Licenses required? | No | No |
| What is the stamp duty? | 7.5% on the purchase price or the market value (whichever is higher) | 7.5% on the purchase price or the market value (whichever is higher) |
| What other fees are applicable? | · Legal fees and other registration costs range from 1 to 3% of the property value· CI$500 application fee· $100,000 certificate issue fee· $1,000 per dependant | · Legal fees and other registration costs range from 1 to 3% of the property value· CI$500 application/renewal fee· $20,000 certificate issue fee· $1,000 per dependant |
| Can the holder eventually earn citizenship? | Yes, eligible to apply after five years | No |
Data sourced from Cayman Islands Government and is subject to change.
Other RBI programmes in the Caribbean
Some other countries in the Caribbean offer permanent residency (PR) to investors – however, the Cayman Islands are a more expensive option compared to those offered elsewhere, as the initial investment is upwards of US$2.4 million in developed real estate excluding other fees.
Turks and Caicos Islands come second requiring a minimum real estate investment of US$1,000,000 to acquire PR, with Bermuda third requiring a US$750,000 investment fee.
The Bahamas is unique in offering a fast-tracked application for an investment of US$1.5 million, or via the normal route, with property valued US$750,000 and over.
The least expensive option to gain PR is Montserrat as it only requires an investment of US$150,000 after residing on the island for five years.
Minimum investment and fees associated with obtaining permanent residency (PR)
| Minimum investment in real estate required for PR | Stamp duty | Other fees | |
| Cayman Islands | US$2,400,000 | 7.5% on the purchase price or market value, whichever is higher | – Legal fees: 1-3%- Application fee: $500- Certificate Issue fee: $100,000- $1,000 per dependant |
| Anguilla | US$750,000 | 5% for developed property, 6.25% for vacant land | Transfer tax: 5% upon closingAlien Landholding License: US$400 |
| Bahamas | US$750,000 or US$1,500,000 for fast-tracked application | 10% | – Registration fees: 0.5% of property value- Certificate of Registration: US$100- Legal fees: 0.5-2% depending on property value |
| Bermuda | PR not available through investment | Between 2%-7% (sliding scale based on property value) | Legal fees: 1% for properties worth US$500,00 and 0.125% for properties worth at least US$2,000,000 |
| Turks and Caicos Islands | US$1,000,000 | 8% | Legal fees: 1.5-2% depending on property value |
| Montserrat | US$150,000 (eligible for PR after five years) | 2.75% of the purchase price excluding contents | – Legal fees: 2% of purchase price- Property tax: 0.05% per year- Building tax: 0.025% per year- Alien Landholding License: US$2,500 or 5% of the purchase price, whichever is greater |
Factors to consider when looking to invest
However, the minimum size of investment is not the only factor that a foreign real estate investor needs to consider. There are various other factors such as citizenship, the levels of investment required, stamp duty, qualifying real estate, legal fees and tax.
Citizenship requirements vary between countries. For example, if residing for five years in Anguilla, Bermuda, the Cayman Islands, the Turks and Caicos Islands and Montserrat, investors can apply for a British Overseas Territory citizenship where they meet the real estate threshold and other programme criteria.
Physical presence regulations play a part here also, as the Bahamas allows permanent residents to apply for citizenship after 10 years, with applicants required to live there for at least six years prior to the date of application.
Out of all the countries in the Caribbean, Bermuda has the most inflexible requirements as foreign investors can only invest in condos situated in special approved development areas and are not granted Bermudian residency or citizenship through the purchase.
While the Cayman Islands requires investment in developed real estate, Anguilla and the Bahamas allows the purchase for construction property; although, the latter requires a permit for undeveloped land or properties with more than five acres. In contrast, the Turks and Caicos Islands allows for the construction of a new home or the renovation of a distressed property.
Another key issue for investors when considering which country to invest in, are the restrictions on foreign ownership of property and if any further permits are necessary.
The Bahamas, the Cayman Islands and the Turks and Caicos Islands have no restrictions on foreign ownership of property. However, the Bahamas requires a permit if the property is more than five acres in size, is underdeveloped or if the property is not used as a personal residence.
In contrast, Montserrat, and Anguilla both requests foreign buyers to obtain an Alien Landholding License prior to the purchase. The latter imposes the most stringent regulations as it imposes an upper limit to the size of land (half an acre) and location (not permissible to own oceanfront properties along sandy beaches, and new builds) and must be at least 2,000 square feet.
The following economic indicators provide a helpful guide for investors on which jurisdiction is best suited to their needs.
Economic indicators
| Population | GDP per Capita | Government Debt | Unemployment | |
| Cayman Islands | 65,722 | US$85,474 (2018) | 6.4% of GDP (2019) | 3% (March 2020) |
| Anguilla | 15,003 | US$19,891 (2018) | 49.9% of GDP (2019) | 7.8% (2005) |
| Bahamas | 393,195 | US$32,217 (2018) | 66.8% of GDP (2019) | 10.4% (2019) |
| Bermuda | 62,281 | US$99,400 (2016) | US$116,500,000 owed in 2018/19 | 5.2% (2019) |
| Turks and Caicos Islands | 38,710 | US$27,142 (2018) | US$3,750,000 owed in 2019 | 7% (2019) |
| Montserrat | 4,992 | US$ 12,754 (2018) | 5% of GDP (2011) | 5.6% (2017) |
Of course, these economic indicators as well as the residency requirements outlined above, are not the only considerations for potential investors. They should also carefully consider their personal objectives for seeking residency in the region. These differ considerably. Investors may be seeking a new home or have an interest in tax residency or may plan to ultimately apply for citizenship. It is important for investors to have a good appreciation of their key objectives and goals. This will make it much easier to decide which country and residency option best meets their needs.
For more information about residency by investment in the Cayman Islands, visit whycayman.dartrealestate.com or email relocate@dart.ky.