Cayman's Tax Benefits

Much has been written about the Cayman Islands being tax-free and whilst this is not exactly true there are definitely benefits to be had for people moving to Cayman in the areas of investments, property and duty-free shopping. The reality from an individual's perspective is that, apart from your payment contributions to compulsory medical insurance and your pension, there will be no deductions from your salary and no Cayman taxes on profits and gains from investments. Moreover there are no sales, goods and services taxes or VAT and many luxury goods in Cayman are either virtually or completely duty-free. (See the information on Duty-Free Advantages later in this chapter). Also if you decide to live out the rest of your days in Cayman, there are no inheritance taxes or death duties. 

The Cayman government raises the money needed to run and improve the infrastructure of the Islands from customs duties, fees for local work-permits and licences, tourist accommodation tax and fees raised from the financial services industry and tourism. Typically import duty is 20% on any item imported into the Cayman Islands, although some goods like vehicles, wines, spirits and some food items are charged at varying rates. 

If new residents import their used household and personal belongings (which they have owned for more than six months) within six months of their arrival, then they will not be charged import duty. After this time normal tariffs will apply. (See the Preparing to Move chapter for more information.) 

In addition, each individual resident has a Customs allowance of CI$350 for personal goods each time they enter Cayman.