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Cayman Islands’ Financial Sector Sees Significant Growth Despite Economic Challenges

Despite the economic challenges posed by COVID-19, the Cayman Islands’ financial sector has continued to thrive. The jurisdiction’s income is predominantly generated from financial services and import duties.

Revenue Breakdown

According to recent data, 31.8% of the Cayman Islands’ income comes from financial services, while import duties contribute 22.5%. This is a testament to the Cayman Islands’ position as a leading financial hub, attracting large institutional investors and hedge funds.

Assets Under Management

The sector has seen significant growth in terms of assets under management:

• Securities and Investment Businesses (SIBs) have a total of US$1.3 trillion in assets under management.
• Mutual Fund Administrators service roughly 16,000 funds, with US$2.1 trillion under administration.
• The TCSP sector has also seen significant growth, with company service providers managing approximately US$694 billion across various financial sectors at the end of 2020.

Economic Impact

Despite the economic challenges posed by COVID-19, the Cayman Islands took stringent public health measures to control community transmission of the virus. As a result:

• Real GDP declined by only 6.7%.
• Unemployment increased from 3.5% in 2019 to 5.21% in 2020.

Regulation and Positioning

The Cayman Islands has also taken steps to regulate private funds by registration through CIMA, and is now the third-largest foreign holder of US securities after Japan and the United Kingdom.

Conclusion

Overall, the financial sector remains a significant contributor to the Cayman Islands’ economy. Its strategic location and favorable business environment make it an attractive destination for global capital.