Skip to content

What Reuters Got Wrong

July 25, 2011

On June 28, 2011, Reuters published an article entitled “A Little House of Secrets on the Great Plains.”  That article compared Cheyenne, Wyoming and the company Wyoming Corporate Services to ‘the secretive business havens of Cyprus and the Cayman Islands.’

While the article itself raised several interesting and timely issues, the images it evoked were more suited to the fictional work of John Grisham or Tom Clancy.  I freely confess that, like Reuters, before doing some research, my knowledge of finance and business in the Cayman Islands was based largely on ‘The Firm.’  From the comments of President Obama, quoted by Reuters, I’m not the only one to rely on fiction for my facts.  However true this image may have once been, the times have moved on.

Business incorporation in the Cayman Islands works much like that in Wyoming.  Business incorporators in both locales must prove to someone who they are, where they live and how they may be contacted. Since both jurisdictions have such attractive business and tax laws, it is natural for businesses geared toward helping companies incorporate, register and operate, to flourish. As discussed in earlier posts, commercial registered agents may represent thousands of businesses; business service providers offer executive business suites (both virtual and actual), mail forwarding, telephone services, etc.  None of this is unique to either  Cayman or Wyoming, but since these places have favorable laws, it makes sense for businesses to gravitate there.

But business environments aside, there are some significant differences.  There are 280 or more banks in the Cayman Islands;  Wyoming is home to all of 37 banks.  Cayman has historically had no taxes at all.  Wyoming, while lacking corporate income tax, does have a minimal sales tax, and generates a great deal of revenue from oil and gas production.  While Wyoming makes a great effort to attract business to the State, its banks hold maybe $6.8 billion in assets, while Caymanian banks holds about $1.8 trillion in international assets.

By relying on the fictional stereotype of Cayman being a breeding ground for international money launderers and other crooks,  Reuters has done Cayman, Wyoming and itself a great disservice.  While you can find villains in any population, Cayman and Wyoming have both taken great thought and care in creating a business and banking atmosphere designed to attract legitimate business and revenue to their respective jurisdictions.  But even with all that business, the odds of seeing Tom Cruise acting as a tax lawyer relaxing on the beach after advising his clients about tax evasion seem pretty remote for Cheyenne, Wyoming.

Advertisements
Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: