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Living In An Offshore Tax-Haven

People usually expect “offshore” tax-havens to be wonderfully exotic places. But in reality, they’re not. Linda and I have lived in three different ones during our marriage – Bahamas 1967-70, New Hebrides (now Vanuatu) 1972-75, and Cayman 1978 to date – mostly in apartments no different from those we lived in in Canada and Spain.Nassau (Bahamas) was a popular tourist destination whose beach-oriented expat culture was fun for us as newly marrieds, but no more exotic than Surfers Paradise had been for me as a young man in my home state in Australia. Vila (New Hebrides) was exotic because of its off-the-beaten-track location, and because of the lifestyle of the locals, some of whom lived in straw huts. By contrast, we lived in apartments or bungalows. Our homes there were much the same as the ones the better paid among us live in here, in Cayman.

Jobs in offshore tax-havens are not exotic, either. As an accountant and trust-officer I did more or less what I had done in Brisbane and London and Toronto, although the dress code is rather more casual in the islands. As a teacher and office-secretary, Linda did what she had done in the regular world, too. The teaching curriculum was the same as in Britain, except for a few local adaptations.

As expats in Cayman, our lifestyle changed only as our domestic circumstances changed. We came here as the parents of a two-year-old boy, both of us working while Ross was at Mr Budd’s kindergarten. Linda picked him up every day when her school was out and drove him home for the standard cookies and orange juice. My office was a mile from home, close enough for me to drive home for lunch, on the days I didn’t brown-bag a sandwich to eat at my desk when I was busy.

We’re both retired now; I do a bit of consultancy and Linda signs Notary Public documents at our dining-room table. Socially, we do what retirees do everywhere, pretty much – including grumbling about the high cost of everything.

We run two cars, and Ross used to ride a bike. Traffic was light when we first arrived, as you’d expect in a town of 17,000 people. Today’s population is three times that, and the roads get a bit congested during rush hours. Because the government is rich (from all the fees paid by people with tax-haven companies), our roads are all in good shape. Most have footpaths (sidewalks) on each side, though not all.

The mile-long road between our house and town has no footpaths, and becomes almost one-lane when there are pedestrians on each side. The speed-limit is thirty m.p.h., but even that is dodgy when there are housemaids walking back and forth to work, or cruise-ship passengers wandering along checking out the unexotic houses. When that happens, drivers just have to pull aside and wait.

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About half the cars on the Island are left-hand-drive (made in the US or Europe), and half right-hand-drive (made in Japan or Britain). We locals resign ourselves to occasional confrontations with tourists driving on the wrong side of the road, in rental cars with white plates. We just stop in our tracks and wait till they figure out what they’ve done wrong!

I suppose Cayman’s population-mix could qualify as exotic. Only a third of all residents are “real” Caymanians; the rest are immigrants or transients. Three quarters of the Caymanians have a mixed African-European ancestry; the other quarter is either full European or full African. There is no racial or ethnic discrimination among Caymanians these days; they are pretty solidly united in their resentment of being out-numbered by expat residents.

(The flip side of that sentiment is that we expats are equally united in our resentment of the resentment. There are natural occupational divisions among the expat communities, and the ethnic groups usually socialize among themselves; but I’m not aware of any colour or ethnic discrimination. That absence is Cayman’s gift to the world!)

Caymanians see us as taking all the best-paying jobs at all levels. With the whole world to choose from, hedge funds and other tax-haven employers are always going to prefer the best educated and most experienced people they can find, regardless of nationality – so Caymanian applicants tend to be fobbed off with token important-sounding titles and positions.

Other employers would always hire cheap and hard-working low-skilled migrants ahead of Caymanians, if they could. By law, all migrants are indentured to specified bosses. (Not “owners”, please…). They can be fired out of hand, and receive only nominal protection from our Labour laws. Government is the employer of choice for Caymanians of all levels of education and competence – and, in practice, the employer of last resort.

Legally, Cayman’s labour market is tightly controlled by our Immigration Department and related committees packed with political appointees. Their agenda is to force private-sector employers to hire and promote native Caymanians, largely regardless of actual suitability. The employers respond by imposing “glass ceilings” above those they are forced to hire. And, naturally, Caymanians in the indentures-issuing agencies do each other favours, by nodding through each other’s applications for Work Permits. It’s always helpful to have friends in high places…

When we first came to live in Cayman (1978), unskilled migrant workers were overwhelmingly Jamaican and Central American Latino. When the booming economy began requiring ever more migrants, it became socially desirable to diversify the sources. Today, there are quotas that limit the numbers of transients allowed to be imported from the traditional sources; private-sector employers are encouraged to look further afield. India and the Philippines are now major sources; and a hundred other countries are on the list. If there’s anybody reading these words from Swaziland or Andorra or Kiribati, you’d be a shoo-in for a Work Permit. Go for it!

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