Everyone knows that creating jobs is the only way for the Cayman Islands to continue to enjoy a high degree of economic success.



But how exactly does a country “create jobs”? There are actually only two ways: growth of existing companies or the attraction of new ones.

Can the government do anything to encourage or facilitate the growth of local companies? Not really. All other things being equal, local companies will only grow if demand for their products and services grows. What can the government do to affect that? (For most non-financial companies the only answer is to grow the population to provide more customers. How do you grow the population? Create jobs! Oh, back to square one).

This fascinating report from Endeavor Insight reveals the main reasons that young entrepreneurs choose the location for their business venture. Spoiler alert! Tax rates do not rank very highly as a factor. Why not, you ask? Well, tax is only an issue if you are making money. By the time a new business starts to make money and tax becomes an issue, it’s often too late to move.

So what are the biggest issues? It turns out that the two main factors leading entrepreneurs to choose a location are quality of life and access to talent. While Cayman rates very highly on quality of life, access to talent is another matter.

Do new companies in Cayman have good access to talent? In a sense, yes. If talent cannot be identified in the local population, it can be imported. However, work permit fees represent a significant additional cost, on top of the cost of relocating a worker from overseas.

Furthermore the byzantine immigration system can present unexpected hurdles to the uninitiated, even when an employer has done all they can to identify a local worker and failed. (Cayman Enterprise City allows e-Commerce and certain other types of company to avoid this expensive minefield).

Given the importance of access to talent in attracting inward investment, Cayman needs to offer something to level the playing field with competing locations. At the very least Cayman needs to waive work permit fees for new companies (ideally for a period of several years, long enough to offset the additional costs over a company’s immediate investment horizon). Even if the rest of the byzantine system remains; at least then companies that can demonstrate no Caymanians are available are not further penalized by five figure work permit fees on top of the costs of relocation.