The building in tax haven that 20,000 firms call ‘ home’
YOU’D expect the registered offices of 20,000 companies to occupy a significant financial district all of their own.
But not when they base themselves in the Cayman Islands.
In fact, almost that many are listed in the Caribbean tax haven at just one quiet, five-story office block called Ugland House.
Another 80,000 are registered elsewhere on the British Overseas Territory, meaning there are twice as many firms as inhabitants.
However, businesses don’t go there for the blue skies and glorious beaches – it’s because they don’t have to pay any tax.
They may not be breaking the law, but legal tax avoidance – as opposed to illegal tax evasion – is thought to keep £20billion a year out of the British Treasury. Now, a BBC documentary crew has tried to shine a light into some of the Caymans’ darker corners.
Jacques Peretti, presenter of Britain’s Trillion Pound Island: Inside Cayman, was given unprecedented access to the secretive territory.
With £1.5trillion passing through the islands’ banks, the Caymans seem to offer a dream lifestyle. But in a place where a four-bed home costs nearly £2million, one British couple who moved there revealed the reality of living in a tax-free state that generates income from import duties.
Paula and Paul, who moved from Manchester, told Mr Peretti that, while they don’t pay tax on their joint income of £40,000, they pay over the odds at the supermarket, where fish fingers cost £8.50 and Hello magazine is £6.
Another scene showed just how hard life can be for the island’s natives, with inflated prices and no welfare state to fall back on. Retiree Emily, who lives with her daughter and three grandchildren, faces homelessness after struggling to pay a £1,500 monthly mortgage on her decrepit home.
The 67-year- old said: ‘ The Cayman Islands is the fifth richest country in the world and you are going to tell me that they can’t help me?’
Meanwhile, its wealthy residents are busy building luxury seafront home with several swimming pools and flying their hairdressers over
Hairdressers flown in from LA
from Los Angeles. President Obama once said Ugland House symbolised what was wrong with tax havens, saying of the block and its 20,000 firms: ‘Now, that’s either the biggest building or the biggest tax scam on record.’
Having looked at it and been sent away by security, Mr Peretti, said: ‘There are nearly 20,000 companies registered in that building. Looking through the window, I saw a lot of desks but there wasn’t a single person at any of them.’
Jude Scott, former boss of law firm Maples and Calder, registered at the block, told him that firms base themselves on the Caymans for a number of reasons – but did not include tax benefits.
Caymans’ premiere Alden McLaughlin denied it was a tax haven, calling it an ‘international finance centre’.
He added: ‘ If there are secrets in Cayman, I don’t know anything about them.’
Britain’s Trillion Pound Island: Inside Cayman will be screened at 9pm tonight on BBC2.