The Cayman Islands: A Natural Base For International Groups

Originally published in September 2001

There is a trend towards international groups establishing holding companies with a physical presence in offshore jurisdictions. The use of offshore holding companies is not new. What is new is the motivation for their use.

Historically the use of offshore holding companies was driven largely by taxation mitigation and in the right circumstances depending upon, amongst other factors, the location of investors, the source of profits and the existence of double tax treaties between the relevant jurisdictions, a holding company in an offshore jurisdiction could provide taxation savings. Onshore jurisdictions spent and still spend considerable time and effort countering the tax motivated use of offshore holding companies.