The Cayman Islands and Colombia are to sign an automatic exchange of tax information agreement under the Multilateral Convention on 1 July 2014. The Tax Information Exchange Agreement (TIEA) will be in accordance with global regulatory standards.
This will be Cayman’s 36th such agreement, the third in 2014, with the Seychelles agreement being signed in February and an agreement with Belgium signed in April. Negotiations are currently underway with an additional 14 nations.
According to an official release, Colombia has recognised that the Cayman Islands is a jurisdiction of such significant transparency and regulatory standards to order its removal from Colombia’s Tax Haven List (non-cooperative jurisdictions).
Insurance Managers Association of Cayman (IMAC) chairperson, Rob Leadbetter, said: “We view Latin America, and Colombia in particular, as a solid market in the captive insurance space.“
“This agreement coming into effect reinforces Cayman as a viable option for Colombian companies looking for self-insurance alternatives as well as for investment funds and trusts. With only a handful of jurisdictions on this white-list, we are well-positioned to offer a valuable service to these companies”.
Nations on Colombia’s Tax Haven List are subject to transaction restrictions and tax penalties not applicable to ‘white-listed’ countries, including a 25 percent tax rate for portfolio investment proceeds as opposed to the 14 percent tax rate applied to white-list domiciled entities.
Business opportunities between the two nations are plentiful at present. Colombia is now the third freest economy in South/Central America, according to the 2014 Index of Economic Freedom, due to its increased focus on improved regulatory efficiency and enhanced financial sector competitiveness.
