As part of a set of articles looking at how offshore centers have tried to cope with the pandemic and how this frames their status as wealth hubs, we talk to Ogier, the international law firm.
As part of a series of articles examining how international financial centers have coped with the pandemic and what the experience has taught industry figures, we talk to international law firm Ogier. It gives its perspective on the Cayman Islands. The answers are from Anthony Partridge, partner, and Gregory Haddow, associate. (See a previous article here that carries comments on the quarantine rules that had, at the time of writing, been an issue for the Caribbean jurisdiction.)
How in broad terms have the travel restrictions and other
controls imposed by the COVID-19 pandemic affected business in
IFCs? Have, for example, the massive cuts in flights meant that
people thinking of moving to IFCs have had to put back plans, or
cancel them and contemplate other options?
Anthony Partridge: “Trust and private wealth work has continued to flourish in the jurisdiction despite the lack of flights and the restrictions on our borders. Inevitably some individuals have put relocation plans on hold until borders are back to normal. However, we have seen a number of clients purchase property after remote viewings with the plan of relocating to Cayman once able."
From a more positive point of view, has the fact that
IFCs are often doing well with vaccines, have low crime and a
high quality of life been even more of a selling point
Gregory Haddow: “This depends on what qualities the particular individual prioritizes. The jurisdiction has long been known for its work-life balance and high quality of life and these have been significant merits that have inevitably attracted a large number of HNWIs to Cayman in pre-COVID times. Vaccination rates are relatively high when compared with most developed nations around the world. Interestingly, Cayman is also ahead of many other offshore IFC centers in terms of percentage population rates of vaccination with just over 84.8 per cent.(1) This is compared with Jersey with 75.6 per cent (2), the Isle of Man with 75.5 per cent (3), Bermuda with 67 per cent (4) and the Bahamas with just 18 per cent.(5) Some may find this additional quality to be an addition 'selling point', however, we would consider it unlikely to remain a deciding factor for long, especially as the global community catches up with the Islands in terms of vaccination rates.”
How has training and hiring on-the-ground talent been
affected or changed over the last 18 months? How, for example, do
smaller IFCs stay competitive with their larger hub rivals that
are more likely to be able to attract talent from outside the
Anthony Partridge: “The jurisdiction has always been an attractive location for qualified individuals to relocate to. The global pandemic, in our experience, has caused many individuals located onshore to question their current way of working and has driven a shift and desire to try a new way of living. This, in conjunction with a very healthy stream of private client work into the Islands over the last 18 months, has created a number of new and exciting opportunities for talent coming to Cayman.”
Have travel constraints caused a talent squeeze? If so,
how have you countered this?
Gregory Haddow: “Travel restrictions have meant that travelling to Cayman is harder than it once was. However, in our experience, it has not stopped those who wish to relocate here from doing so.”
Are there any specific services that have opened up in
the last 18 months of disruptions? If so, what are they and how
has your organization responded/played a part?
Anthony Partridge: “A concierge type of service for new arrivals to the islands has been a very successful part of this firm's practice over the last 18 months. The firm has been able to use its departments covering various legal service areas (such as property, immigration, private wealth and corporate) to great effect. Clients have been able to enjoy a 'one stop shop' for all their relocation questions and needs.”
Have you seen consolidation of firms, new arrivals, for
Anthony Partridge: “Yes. The global events over the last 18 months have created a number of opportunities for individuals in the jurisdiction. Cayman firms have certainly been on a hiring campaign with a number of new arrivals across a number of firms and departments.”
Have you seen jurisdictions switching focus, moving more
into crypto and digital assets, for example?
Gregory Haddow: “We have seen more enquires in relation to setting up structures to hold crypto assets.”
Following on from that, are you seeing specific services
or regulatory changes being designed to serve or attract frontier
markets, where adoption trends differ from established wealth
markets, and the wealthy are generally at a much earlier stage in
their wealth creation?
Gregory Haddow: “The commencement of the Virtual Assets Service Providers Act in the Cayman Islands, which provides a framework for the regulation of virtual asset service providers by the Cayman Islands Monetary Authority is an example of this."
In your view what are the top five elements for an IFC to
be a compelling draw for clients?
a. good stock of reputable financial institutions and talent
b. solid legal foundation (i.e. well-developed jurisprudence and sophisticated statute)
c. politically stable
d. well regulated
e. good connectivity/accessibility
Data from various sources seems to suggest that IFCs
remain as important to the global financial world as ever, for
all the challenges that have come in the form of beneficial
ownership disclosures, crackdowns by certain governments, etc.
Looking into a crystal ball, where would you expect to see the
sector in a decade’s time?
Anthony Partridge: “Despite the changes in regulation, the IFC centers of the world will remain hubs where financial service talent will pool and collect. Even with onshore jurisdictions legislating to make holding assets offshore less tax efficient, industries such as the trust industry should remain active as settlors seek to establish trust structures for reasons other than tax efficiency (i.e. succession planning and asset protection).”
1, Cayman Islands vaccination rate - Google Search
2, Jersey vaccination rate - Google Search
3, Isle of Man vaccination rate - Google Search
4, Bermuda vaccination rate - Google Search
5, Bahamas vaccination rate - Google Search