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Benedicte Gravrand, Opalesque Europe:

The Cayman Islands, a British Overseas Territory in the western Caribbean Sea, are regarded as among the top offshore financial centres in the world. But it came to this kind of prominence only relatively recently.

According to the IMF (1987), an offshore financial center (OFC) - not to be confused with "tax haven" - is a country or jurisdiction that provides financial services to non-residents on a scale that is incommensurate with the size and the financing of its domestic economy. Hedge funds who register offshore are generally presumed to be driven by lighter regulatory requirements rather than perceived tax benefits.

The Cayman Islands historically started by being a tax-exempt destination a long time ago: in 1794, the Caymanians rescued the crews of a group of ten merchant ships, including the HMS Convert, which had struck a reef. King George III rewarded the island with a promise never to introduce taxes as compensation for their generosity.

Cayman didn't really start growing as an offshore financial centre till the early 90s. It had been developing since the late 1960s as a financial centre but mostly around the banking industry. But after the Bahamian government started changing its attitude, then sponsors started looking to the more stable Cayman Island......................

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