FUTURE OF CAYMAN


Despite external threats, Cayman continues to be the domicile of choice for hedge funds. Cayman Funds takes a look.


The US election season is upon us, and with that comes arguments about tax.


The likely Republican nominee, Mitt Romney, revealed recently that he pays around 15 percent of his annual income in tax—a considerably lower proportion than the average American. This looks like straightforward party politics, and it is, but there is slightly more to it than that. Among the predictable hand- wringing of Romney’s opponents about the seeming incongruity of a very rich man paying less of his income in tax than a relatively poor one, there is another story. Some of the funds in which Romney invests, and which are therefore popularly assumed to be to blame for the low taxes he pays, are based in the Cayman Islands. Ergo, goes the argument, the Cayman Islands is damaging to the US treasury, and should be tackled aggressively by government.


These arguments, or European versions of them, will be familiar to anyone who


works in or around the Cayman hedge fund industry. That they remain so politically charged as to become a flashpoint in a US presidential election underlines their impact on public perception of the Cayman Islands. And it is this perception that drives much of the thinking that feeds into policy and onshore regulation.


CAYMAN FUNDS | 2012


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