Tag Archives: Cayman Immigration

For many years persons seeking to obtain Permanent Residence in the Cayman Islands have taken a History and Culture Test. It started as a mechanism to attempt to measure a person’s assimilation into the Caymanian community. Being able to hum a verse of “Munzie Boat” and understanding that “Soldiers” wear shells not uniforms could get you part of the way there. No one had to study anything. Aspiring permanent members of our community simply lived it, and it was good.

Of course, the winds of change wreaked havoc on the boat in the Sound. All in the name (or in consequence) of progress, we crushed the Soldiers under our cars (to the extent we did not smash them for bait) and collected their homes as trinkets off the beach. At the same time, the Barcadere became the Cove, Dolphin became Mahi Mahi, Weeping Willows became Casuarinas and the Sea became the Ocean. Cocoplum went from being a fruit, to an address. Even our spelling is now changing, as has (seemingly) our ability to freely access and enjoy the coastline. It has all fundamentally happened in as little as 30 years. The pace of change (some call it progress) is accelerating.

The lyrics came true. At least in Grand Cayman it appears that “all the Soldiers are dead boys, all the Soldiers are dead”.

It used to be that Caymanian culture was learned enjoying a good rundown with friends, all the better if washed down with swanky. In that setting, on a moonlit porch, expatriates could learn of Christmas Breezes, Men of Iron in Wooden Ships, Smoke Pots and National Bulk Carriers. In moments of silence they could ponder the similarities between Wompas and Flip Flops, and the differences between types of Breadkind, as well as distinguish between Squabs and Prop Props.

Those days have passed.

Many people yearn for those simpler times, and the relative cohesiveness of the community. The legislation we operate under (first drafted in 1971) has always enshrined focus (whether agreed upon by those administering it or not) on “cushioning” the Caymanian way of life against the impact of inevitable change. Indeed, the Permanent Residence Points System, prescribed by the Cabinet, emphatically states that “an applicant’s integration into the Caymanian society will be measured by reference to his (sic) knowledge of local history, tradition, customs and current events.”

Despite the inherent legal (and political) expectations, the Permanent Residence history and culture test has (in reality) little to do with actual integration into the Caymanian society. It is a test of knowledge (or at least recollection). Reading books is good, and will help, but ultimately, and several years ago, the government decided to provide a course. The course has been spectacularly successful. Attendees seem to do extremely well on the test, sometimes scoring 100%. Unfortunately, often due to work or family commitments, not everyone can attend the course or spend the CI$200 required to participate.

Never mind, there has been even more progress. It appears that most of the questions (and answers) are freely available on an App, and otherwise in wide circulation. Some now accordingly suggest there is now no need for any prospective Permanent Resident to spend any time on a porch, read any history books, or attend a course.

Still, we accept, however they may be learned, it is better the facts be known, than not.

Incredibly (although not the fault of the initial authors of the test), some of the facts on which people are assessed, have not been consistently factual. The issue has been known (and attempts made to have it addressed have been ongoing) for a decade. Asking a PR applicant who the Minister of Tourism is, but failing to provide that Minister’s name amongst the options for the multiple choice response (thus making the question impossible to correctly answer) is not a good look – especially if such a thing were to happen multiple times (and seemingly for years) even following concerns being raised.

Some facts are important for people to understand who we are and where we come from. The Treaty of Madrid, Captain Pack and Long Celia are all highly relevant, and important (hey, Bodden Town, shouldn’t we get her a statue?). On the other hand, and although I am a fan of them all, it appears to me that Steel Pans, Jerk Chicken, and Batabano ought not be a focus on integrating expatriates (although recognition that these things are traditionally no more Caymanian than the internet or rum and coke, probably should be).

Let there be no doubt. Choosing who can and should gain and maintain the privilege of being a settled resident of these Islands should be firmly in the hands of the Caymanian people applying appropriate and transparent standards. That prospective permanent residents be asked to evidence their particular contribution, participation, and commitment is not offensive. The interests of these Islands and their people must be paramount.

However, the system (and every material aspect of it) must be fair and rational. The Constitution requires it, and our forefathers would expect no less.

The reality is, if we fail to treat people fairly, the Constitution will ultimately deprive the Caymanian people (through the actions of their elected representatives) of the right to determine who can stay, and (quite properly) hand that determination to the Courts.

The easy answer, of course, if we wish to avoid that, is to ensure our systems (however strict we wish them to be) treat everyone fairly.

Perhaps someone might (in furtherance of maintaining their prescriptive right albeit in polite disregard of any inappropriately located no trespassing sign), peaceably sit in the shade of a grape tree, stare at the sea, and contemplate that possibility. It is not too late.

On 30 March 2023, The Court of Appeal declared that Section 37 (3) Immigration (Transition) Act (2022 Revision) is incompatible with the constitution namely Section 9 of the Bill of Rights, which provides rights to family life and/or private life to residents in the Cayman Islands.

The relevant subsection of the Act, which the Court of Appeal has held is incompatible with Section 9 of the Bill of Rights is:

“(3) In considering an application for permanent residence under subsection (1), the Board or the Director of WORC upon applying the criteria set out in the points system shall only grant permanent residence to all applicants attaining one hundred and ten points or more.”

In the case of D’Souza & Buray, the appellants failed to obtain the required 110 points under the Points System to be granted permanent residency (PR). They appealed on the basis that this infringed their rights to a private life based on their individual circumstances.

This declaration of incompatibility will present immediate difficulty in the processing of PR applications, at least those where applicants are assessed to have less than 110 points. Up until now those individuals who did not achieve 110 points under the Points System and had no other way of remaining in the Cayman Islands were required to leave the Islands for at least 1 year.

The Cayman Islands Government will now need to act to amend the aforementioned Section 37 in order to make it compatible with the Bill of Rights and at the same time provide a revised legal framework for the consideration of pending and future PR applications so that an applicant’s Constitutional Rights can be considered.

It is difficult to know how the Government will react, but it is earnestly hoped that applicants who have achieved 110 points will have their applications progressed to a grant in any event. This is a particular concern when applications in some cases have been pending for more than a year. At the current time, applications for PR pursuant to the Points System are taking up 15 months to be concluded and it appears that the Caymanian Status and Permanent Residency Board are still not considering them.

Currently, it is understood that a Committee chaired by Mr. Steve McField, a well-known and experienced attorney, is looking at the Points System and no doubt this decision will be at the forefront of their minds when they make recommendations to Cabinet. This however is not the first similar committee in recent times and none of the previous committees/reports have led to the aforementioned sections or similar ones being amended so as to make them compatible with the Bill of Rights.

Alastair David appeared on behalf of the appellants and is a Senior Associate from HSM Chambers. Commenting on the Judgment, he shares “While it is gratifying to see that the Court of Appeal agree with our submissions that the current law is incompatible with the Bill of Rights, this has been something which HSM Chambers has been raising concerns with for over six years.”

In regards to the overall effect of the Judgment, Mr. David said “This Judgment should not be viewed as meaning that all expatriates will be able to obtain Permanent Residence in the Cayman Islands. Subject to any legislation change, I envisage it will mean that there will be an increase in numbers of expatriates who can stay past their notional roll over date on the basis of their strong family life or private life connections which they have established in the Cayman Islands.”

Work remotely in paradise? The Cayman Islands has made this a reality with their Global Citizen Concierge Programme, which allows persons with financial independence to live in the Cayman Islands for up to 24 months. It is available to anyone who can demonstrate their existing (and anticipated ongoing) employment outside of the Cayman Islands.

Key characteristics of Cayman’s Global Citizen Concierge Programme include:

Created in October 2020.
Available until 30 November 2023.
Individual applicants must make a minimum household income of US$100,000 for single households.
Applicant with an accompanying spouse/civil partner must make a minimum household income of US$150,000 for two person households.
Applicant with a spouse/civil partner and dependent child or children must make a minimum household income of US$180,000.
The government fee (per annum) for up to two persons is US$1,469 and an additional $500 per dependent.
The holders of these certificates are expected to reside in the Cayman Islands for a minimum of 90 days each year.

HSM’s Immigration team is available to assist with these applications and have prepared a guide of the different options available for residency in the Cayman Islands.

Click on the icon below to download this guide.

Last updated: 22 October 2020.

This guide is intended only to provide a summary of the subject matter. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this guide without first obtaining specific professional advice. Alternative solutions also exist which may better suit the requirements of a particular individual or entity.

Associate Alastair David covers this case, which has relevance to permanent residence applications and revocations. On 29 April 2020, the Grand Court in the Cayman Islands handed down a decision in the case of Ellington v Chief Immigration Officer of the Cayman Islands. The Grand Court concluded that:

The Law surrounding Prohibited Immigrants was incompatible with Section 9 of the Bill of Rights; and
The decision of the Immigration Appeals Tribunal was wrong in Law.

Currently, the Attorney General is appealing against the decision with respects to (i) and therefore this article will focus on (ii).

The Background

Mr Ellington is a Jamaican national who has resided in the Cayman Islands since 2007. Up until 2013, Mr Ellington’s stay in the Cayman Islands was rather unremarkable. He had a series of work permits and had no convictions recorded against him. However, in August 2013, he married his first wife (a Caymanian) and then on 23 September 2013, was involved in a robbery which took place in a supermarket. Mr Ellington’s part in the robbery was that of a ‘getaway driver’ and he pleaded guilty to being an accessory after the fact to the robbery. Justice Quin sentenced him to a custodial sentence of 2 years and made no recommendation in regards to his deportation from the Cayman Islands.

In consequence of his sentence, being a term of imprisonment of greater than 12 months, Mr Ellington automatically became designated a Prohibited Immigrant, by operation of Law.

In December 2013, while Mr Ellington was a serving prisoner at HMP Northward, his wife gave birth to a child. As Mr Ellington’s wife was Caymanian and settled in the Cayman Islands their child was born Caymanian. While Mr Ellington was serving his sentence he applied for an Residency and Employment Rights Certificate (“RERC”) as the Spouse of a Caymanian. When Mr Ellington was released in February 2015 his application was still pending.

A RERC as the Spouse of a Caymanian gives the holder the ability to live and work in the Cayman Islands outside of the Work Permit regime. Unlike an RERC obtained under the points system, the holder of an RERC as the Spouse of a Caymanian can work in any role in the Cayman Islands and pay no annual fee whereas an RERC holder who obtained his RERC through the points system can only work in the job title on his RERC and they (or their employer) are expected to pay an annual fee the equivalent to that of a work permit for their occupation.

Upon his release from custody Mr Ellington was treated as a “tourist visitor” for the purposes of the Immigration Law.

In October 2015, Mr Ellington’s relationship with his first wife broke down and he soon after entered into a relationship with a new woman who he was later to marry. As a result of the breakdown in his first marriage, Mr Ellington’s RERC application was rejected. Mr Ellington’s second wife was also Caymanian and had a Caymanian child from a previous relationship.

Mr Ellington was formally divorced from his first wife on 21 September 2016 and he married his current wife on 1 October 2016.

A new RERC as the Spouse of a Caymanian application was submitted on 10 November 2016. That application was eventually rejected on 27 April 2017 by the Caymanian Status and Permanent Residency Board (“the Board”).

By the time of the rejection of the second RERC application, Mr Ellington was only permitted to stay in the Cayman Islands as a result of an interim injunction obtained on 10 November 2016, preventing his removal from the Cayman Islands pending a leave application to Judicially Review his designation as a Prohibited Immigrant.

Mr Ellington appealed the rejection of his RERC to the Immigration Appeals Tribunal (“IAT”) and while the IAT accepted the Board erred in Law in their initial decision, they declined to grant him an RERC as the Spouse of a Caymanian. The IAT’s “reasoned” decision for rejecting the application was as follows:

“By unanimous vote the Tribunal refused to grant RERC as a result of consideration of the appellant’s character under Section 31(3) (c) of the Immigration Law (2015 Revision), namely his conviction and sentence to 2 years imprisonment… The Tribunal accept that the marriage was stable… but the one allegation that remains is the conviction.”

Appeal to the Grand Court

The Appellant appealed to the Grand Court on a number of basis. The main ground was:

The IAT had failed to consider the Appellant’s and his family’s Constitutional Rights, i.e. their section 9 Bill of Rights (“BOR”) right to a family and private life.

Position of the Parties

The Appellant’s position was straight forward. As a result of the BOR, the Tribunal were required to consider whether or not it was “reasonably justifiable” to reject his application.

The Attorney General defended the appeal on the basis that:

Section 9 of the BOR was not engaged by the rejection of the RERC.
The Factors in Section 31(3) Immigration Law (2015 Revision) (“the Law”) were the only considerations.

The Law

Section 9 Bill of Rights

(1) Government shall respect every person’s private and family life, his or her home and his or her correspondence.

(3) Nothing in any law or done under its authority shall be held to contravene this section to the extent that it is reasonably justifiable in a democratic society —

(a) in the interests of defence, public safety, public order, public morality, public health, town and country planning, or the development or utilisation of any other property in such a manner as to promote the public benefit;
(b) for the purpose of protecting the rights and freedoms of other persons;
(e) to regulate the right to enter or remain in the Cayman Islands.

Section 24 Bill of Rights

It is unlawful for a public official to make a decision or to act in a way that is incompatible with the Bill of Rights unless the public official is required or authorised to do so by primary legislation, in which case the legislation shall be declared incompatible with the Bill of Rights and the nature of that incompatibility shall be specified.

Section 31 Immigration Law (2015 Revision)

(1) The spouse of a Caymanian may apply to the Chief Immigration Officer or the Caymanian Status and Permanent Residency Board for permission to reside in the Islands and if such application is successful the Chief Immigration Officer or the Board, as the case may be, shall grant to the applicant a Residency and Employment Rights Certificate for a period of seven years and such Certificate when granted may, upon application, be renewed at the discretion of the Chief Immigration Officer or the Board.

(3) The Chief Immigration Officer or the Board shall take into account the following, namely that-

(a) the spouse of the applicant is Caymanian;

(b) the marriage is not a marriage of convenience;

(d) the applicant is in good health as evidenced by a recent medical certificate;

(e) the marriage is stable; and

(f) the applicant and his spouse have sufficient financial means to support himself and his dependants listed on the application as accompanying him.

(6) The spouse of a Caymanian shall have no right to reside or be gainfully employed in the Islands unless he is the holder of a Residency and Employment Rights Certificate granted under this section and he shall not be entitled to apply for, or to be granted, a work permit or the renewal of a work permit, but where a work permit is in effect on the date of the marriage he may continue to work under the terms and conditions of the work permit until its expiration.

(7) Notwithstanding subsection (6), whenever the Board or the Chief Immigration Officer is satisfied that there are exceptional circumstances it or he may grant or renew a work permit for the spouse of a Caymanian for a period not exceeding three years in total after which no further permits may be granted or renewed in respect of that person unless the marriage is dissolved.

(9) Where a person who is the spouse of a Caymanian and who has at any time been-

(a) the holder of a work permit;
(b) employed by the Government of the Islands; or
(c) employed in the Islands by the Government of the United Kingdom,

applies for a Residency and Employment Rights Certificate under this section, then in the absence of exceptional circumstances the Board or the Chief Immigration Officer shall approve his application.

Judgment

In his Judgment Williams J confirmed that not only was Section 9 of the BOR engaged with regard to RERC applications but that the Tribunal had to consider Section 9 when dealing with an application.

The Plaintiff’s family life consists of his relationships with members of his family. Therefore his relationships with his wife or any relevant children under 18 are considered to be family life that he has a right to have, protected under s.9 of the BOR. The wording of s.9(1) BOR implies a positive obligation on the part of the state to respect existing family life, not just a negative duty to avoid expulsion. If there is a failure to respect family life, the question moves on to whether the interference is necessary or reasonably justifiable in a democratic society for a reason permitted in s.9(3) of the BOR.

In an application by a person for residency rights under an RERC if their spouse is a Caymanian settled in the Cayman Islands, consideration must be given to both spouses’ rights under s.9 BOR….

I am satisfied that s.9 BOR arguments in a RERC application or in cases where the remaining parent or child is a Caymanian will come into play and they involve the weighing up of these opposing rights.

As the Tribunal had not considered Section 9 of the BOR Williams J granted the appeal and remitted the matter back to the Tribunal.

Relevance to Other Matters

The Judgment of Ellington has potentially far reaching effects in respect to the Permanent Residence system in the Cayman Islands. For the first time, the Grand Court has stated that Section 9 considerations must form part of a formal decision process when considering RERCs. The question becomes whether or not this case also impacts:

RERC applications under the points system.
Revocation of RERCs as a result of a breakdown in marriage.

RERCs under the Points Scheme

Currently, neither the Board, the Director of Workforce Opportunities and Residency Cayman (“WORC”) nor the IAT (when considering matters on appeal) appear to consider Section 9 of the BOR or at least the reasons given for their decisions do not specifically reference Section 9 Paragraph 76 of the Judgement in Ellington, certainly gives support to the contention that a two stage consideration should take place in all RERC applications and therefore there appears to be no logical reason why a decision maker should not consider the applicant (and his families) constitutional rights when considering an application under the Points System.

A decision to grant or reject an RERC under the points system would appear to engage Section 9 of the BOR in that a decision to reject that application would mean that the individual would have to leave the Cayman Islands. Section 37 (4) Immigration (Transition) Law, 2018 makes it clear that a failed applicant would have to leave the Cayman Islands when it says:

(4) Where an application under subsection (1) has been refused and the applicant has not appealed against such refusal or has appealed against such refusal and lost the appeal, the applicant is barred from re-applying under the provisions of that subsection and shall leave the Islands upon the expiration of any period during which the applicant was allowed to work under section 66(4) unless the applicant is entitled to remain by virtue of any other provision of this Law; and such debarment shall continue –

(a) in the case of a worker, until the worker re-qualifies under the criteria contained in this section having taken the break in stay required under section 66(1); or
(b) in the case of a Government employee, for a period of nine years following the date of the refusal of the Government employee’s application or any subsequent appeal in respect of that application.

However, one issue that an applicant would have to overcome in seeking to require a decision maker to apply a two stage test would be the current Law. Section 37 (3) Immigration (Transition) Law, 2018 states:

(3) In considering an application for permanent residence under subsection (1), the Board or the Director of WORC upon applying the criteria set out in the points system shall only grant permanent residence to all applicants attaining one hundred and ten points or more.

Whether Section 37(3) is compatible with the BOR and, in particular, Section 9 and Section 24 of the BOR, is a matter which will need to be determined by the Courts (save for a change in the Law). On any reading of Section 37(3) it would appear that it prevents a Section 9 consideration and therefore might well be incompatible with the BOR.

Revocation of RERCs as a Result of a Breakdown in Marriage

If an individual is married to a Caymanian or to a RERC holder, they can obtain an RERC based upon their marriage. However, if their marriage was to come to an end, the Section 40 (1) of the Immigration (Transition) Law, 2018 states:

(1) Subject to subsection (2), the holder of a Residency and Employment Rights Certificate who is the spouse of a Caymanian or has obtained a Residency and Employment Rights Certificate as a result of his or her marriage to the holder of a Residency and Employment Rights Certificate under section 37(16) or any other earlier analogous provision, shall forfeit his or her rights under that Certificate if –

(a) the holder falls within any of the provisions of section 51;

(b) the holder’s spouse ceases to be a Caymanian or to be a Residency and Employment Rights Certificate holder;

(c) within ten years of the marriage, the marriage is dissolved or annulled;

(d) the holder ceases to be legally and ordinarily resident in the Islands; or

(e) the holder and his or her spouse are living apart –

(i) under a decree of a competent court;
(ii) under a deed of separation; or
(iii) in circumstances where, in the opinion of the Board or the Director of WORC, the marriage has irretrievably broken down.

It would appear that Section 40 (1), like Section 37 (3), leaves no discretion to the decision maker to consider Section 9 of the BOR. In circumstances where the spouse whose RERC is to be forfeited has lived in the Cayman Islands for greater than nine years thus, meaning the individual cannot obtain a work permit, the decision to revoke the RERC may very well lead to that individual leaving.

It would therefore appear likely that where the revocation of an RERC would lead to an individual’s removal from the Cayman Islands by operation of Law, given the fact that they will have no alternative permission, Section 9 of the BOR may very well be engaged and therefore should be considered.

When one adds the potential consideration that the person affected may be the victim of spousal abuse and there is no caveat to exempt those individuals, the Law could very well be challenged and be declared incompatible with the BOR.

Conclusion

The case of Ellington may very well prove to be as important as the cases of Razgar[1] and Huang[2] in the United Kingdom. The Grand Court has confirmed that Section 9 of the BOR is engaged in the consideration of RERC applications and therefore decision makers will have to now consider Section 9 and a failure to do so will likely lead to their decisions being overturned in the Courts.

It remains to be seen whether or not Ellington will have the same effect as Razgar and Huang did in the UK, as no doubt the Department of WORC and the Board will try and argue that the Ellington only applies to a small minority of cases. However, the decision in Ellington should not be minimised. For the first time the Grand Court has confirmed that Section 9 considerations apply to Immigration decisions and it is suspected that this will not be the last time that the Grand Court is required to rule on such matters. It appears likely that more and more decisions in the Cayman Islands will involve (indeed must involve) a two stage consideration along the lines set out in Razgar and Huang.

[1] R (Razgar) v Secretary of State for the Home Department [2004] UKHL 27
[2] Huang v Secretary of State for the Home Department [2007] UKHL 11

HSM’s Employment and Immigration lawyers are advising a number of persons and businesses as to the requirements and expectations of the Cayman Islands Law during COVID-19, in particular where businesses may be required to make staff redundant.

Redundancy is defined in Cayman Islands Law as “a situation in which, by virtue of a lack of customers or of orders, retrenchment, the installation of labour-saving machinery an employer’s going out of business, force majeure or any other reason, tasks which a person was last employed to perform no longer exist.”

Cayman Islands Labour Law

A redundancy is a form of “fair dismissal” provided it is carried out in accordance with the Labour Law. The Law provides for preference in employment. If a group of persons carrying out a specific role within an organization are to be made redundant, the Law requires that preference be given according to immigration status. It follows that work permit holders are expected to be made redundant before permanent residents, permanent residents are expected to be made redundant before the spouse of a Caymanian holding a Residency and Employment Rights Certificate, and Caymanians are expected, by Law, to be the last to face redundancy. This is entirely academic if a business is closing down. All persons (without regard to immigration status) will likely be made redundant together. That is perfectly lawful.

Given that a redundancy constitutes a form of termination, it triggers a series of entitlements.

These include severance pay, notice pay, and accrued (but untaken) vacation pay.

Severance Pay is calculated as being one week’s pay, at the latest “basic wage”, for each completed year of service. “Basic wage” means the ordinary wage due to an employee under his or her contract of employment. It does not include such matters as future anticipated gratuities and commissions. Accordingly, for many, the basic wage will be CI$6.00 (or such other higher number set out in their contract of employment. Where no formal contract exists, the amount can be determined by reference to the conduct of the employer and employee – i.e. what is the basic wage that has in fact been paid.

Notice pay is determined by reference to the contract of employment. Where no notice period is prescribed it is deemed to be the interval between pay days.

Accordingly (by way of example) an employee who is made redundant on 31 March and who:

has been employed by that employer for 3 years and 2 months
earns CI$6.00 per hour at basic wage for a 40 hour week (CI$12,480 per annum); and
has a 10 day annual vacation entitlement and has taken none this year;

would generally expect to be entitled to payment on redundancy of:

3 weeks severance of CI$720
One month’s notice pay of CI$1,040 (assuming the employee is not asked to work during their notice period); and
2.5 days accrued but untaken vacation pay of CI$120.

A person in this situation would accordingly expect payment on redundancy of CI$1,880. Such payment is payable immediately on termination.

National Pensions Law
There is generally no entitlement to access pension monies prior to retirement. However, severance payments made on redundancy are not pensionable, but accrued untaken vacation pay, and any payment due in lieu of notice, are considered to be pensionable under the National Pensions Law. Also it should be noted that any additional voluntary contributions made by the employee can be withdrawn due to unemployment.

Health Insurance Law
All residents in the Cayman Islands are required to have “adequate” health insurance. As a general rule the obligation to ensure that health insurance is in place rests with employers. Upon termination of employment employers are generally required to ensure that health insurance is maintained for 3 months following the termination of employment. Employers are however entitled to charge those premiums to the employee. The employer’s obligation to maintain health insurance ends upon the person becoming employed elsewhere, being covered by an alternative qualifying policy of insurance, upon the expiry of 3 months, or upon the person leaving the Cayman Islands (whichever happens first). It follows that it may be of direct economic benefit for persons who held work permits, but who have been made redundant (or otherwise terminated), to leave the Islands as soon as practicable.

Immigration Law
Regulation 9 of the Immigration Regulations provides that where a person on a work permit is no longer employed, any work permit ceases to be valid, and the employer must forthwith notify the Department of Workforce Opportunities & Residency Cayman. Redundant employees who were on a work permit to be in Cayman have no right to remain once their employment ends. In normal circumstances that means that persons are expected to register as tourists and remain in accordance with permissions extended by WORC/Customs and Border Control. Customs and Border Control have announced that where a permission to work in Cayman ends before 22 March persons can simply proceed to leave before the anticipated 22 March, 2020 closure, without first having to “regularize” their permission to be in the Islands.

As matters stand, no expatriate can work in the Cayman Islands without express permission or exemption from requirements. It will not be impossible for an expatriate made redundant to seek and obtain alternative employment without first having to leave, and if normal rules continue to apply, Caymanians, Spouses of Caymanians and Permanent Residents will be given preference for any opportunity.

Rent
The obligation to pay rent will be based on the terms of any applicable lease. In normal circumstances appropriate notice will need to be given, and deposits may be forfeited if notice is not given or there is damage to the rented unit. Some leases may provide for the lease to end upon the termination of a work permit.

Repatriation
Unless provided for by contract, there is no obligation on an employer to ensure that an expatriate employee is able to return to their home country. It is worthy to note that employers have paid substantial “repatriation fees” to the Cayman Islands Government in the expectation that those funds could be applied towards the costs associated with workers getting to their homeland. For some, returning home is not a reasonable possibility. It requires closed third party borders to be crossed, even if flights are available. They may be stuck in Cayman, perhaps for an extended period. The Government has recognized this and it, employers, and the community will have to come together (maintaining social distancing) to ensure that everyone’s basic needs can be met.

We are ultimately, all in this together.

This article is intended only to provide a summary of the subject matter. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this article without first obtaining specific professional advice. Alternative solutions also exist which may better suit the requirements of a particular individual or entity.

Key Contacts

Alastair David
Senior Associate
adavid@hsmoffice.com

Hilary Brooks
Senior Associate
hbrooks@hsmoffice.com

HSM’s Immigration team have taken a close look as to why there is a decline for work permit fees in the Cayman Islands.

It appeared to be inevitable, and may now just be coming true. Income from work permit fees is likely to fall, perhaps precipitously.

According to the Economics and Statistics Office latest Compendium of Statistics, the Cayman Islands Government received $87.3 million dollars in work permit revenue last year. There had been $88.9 million in 2017, and the number had consistently grown in each of the 8 prior years.

The drop in work permit revenue ought not to come as any surprise. What may surprise is the fact that the government revenues appear likely to fall (perhaps significantly), even if (or as) the number of work permit holders grows.

The reasons are straightforward enough. In some cases, Caymanians are advancing in their careers, and replacing expatriates who are leaving. Other expatriates find relief from high immigration fees in the Special Economic Zone. Still others (working for foreign companies with no presence in Cayman) have taken the authorities up on their kind invitation (that we simply cannot understand) to have no work permit at all, as is the case for expatriates in government service.

Those are not however the primary reasons.

With the abandonment of Term Limit Exemption Permits, and an easing of the PR system, significant and growing numbers of expatriates are inevitably proceeding to become Caymanian. The whole process (from arrival and without being married to a Caymanian) usually takes no more than 15 years. This, subject to appropriate limitations, should be celebrated. We are now at a stage that the many of our long term residents have obtained Permanent Residence and are now becoming (or will shortly become) Caymanian. A significant wave of others have acquired Permanent Residence in the past two years. Many of them were delayed in the processing of their applications and so only have a year or two to go before they (and their families) also become Caymanian.

Almost all will have met (or exceeded) the government required conditions for membership. Being Caymanian is an honour, and for those on whom it is bestowed, a privilege. It can (and should) be a source of great pride, but being Caymanian also brings with it a myriad of benefits, including an exemption from having to pay any work permit fees. That exemption applies not only to the Caymanian, but also to their spouse.

The advantage of any exemption varies by occupation. Not all work permits (or permanent residence certificates) are created equal. For teachers, the annual fee is nil; for labourers it is $550; for accountants it is $13,650; and for (equity) partners in law firms, it is $32,400. The reality is that financial services industry professionals (those responsible for the highest fees) have been granted PR in substantial number. They are wholly deserving having fulfilled the criteria for that award. They now qualify and cross the next threshold. They are becoming Caymanian. There does not appear to be corresponding levels of growth amongst executive-level work permit holders (with the pace of their predecessors becoming Caymanian, retiring, or leaving) now outpacing the supply of new accountants, bankers, and lawyers from overseas.

Certainly, the number of work permit holders will likely continue to grow, but at current work permit fees it takes 59 labourers (or 108 Produce Clerk’s or 216 baby sitters) to generate the equivalent revenue in work permit fees, as a single law firm partner. With the ongoing apartment construction boom (fueled in part by a recent change in the stamp duty treatment of pre-construction purchases) there will be heavy construction activity for the next two years. The number total of work permits may well continue to grow, all while the average price paid for each work permit appears likely to continue to decrease.

The likelihood is for substantially decreasing work permit revenues. These will likely be offset by import duties on materials and furnishings required for the new buildings, but when all the construction is complete, that too will diminish. At that stage large numbers of construction workers may be without work and will return to their home jurisdictions. At the same time, we will celebrate the latest wave of PR recipients becoming Caymanian. The monies generated in work permit fees, and the number of work permits, will then fall in unison, perhaps significantly. We can only hope that this prospect is recognized, and being planned for.

All is far from lost. There are alternative revenue sources and options mitigate the consequences, but these will need to be actioned very soon, and likely must include welcoming new residents to our shores.

HSM’s Immigration team explain why the population numbers don’t add up in the Cayman Islands.

Much has been stated in the press of Cayman’s growing population. The Economics and Statistics Office’s Compendium of Vital Statistics estimates the year-end population (as at December 2018) as being 65,813 persons. Of those, an estimated 29,108 are expatriates, and 36,705 Caymanian.

Notwithstanding the statistics (which relate to population), the actual total number of persons physically resident in Cayman may in fact be substantially higher. As reported in the Cayman Compass on 16 May, 2019 (using actual numbers provided by the Department of Immigration) there were 27,263 expatriates holding valid work permits or under government contract as at 6 February 2019 (some 5 weeks after the date of the ESO estimate).

That 27,263 does not include any Permanent Residents or the holders of RERC’s as the spouses of Caymanians, nor the dependents of work permit holders and government contracted workers.

Information received from the Department of Immigration and reviewed by us indicates that there were, last year, approximately 3,000 approved dependents of work permit holders and government contracted workers, and of the order of 5,000 other persons resident by virtue of some form or other of a certificate of residence (whether in their own right, as a dependant, or as the spouse of a Caymanian).

If we allow for some expatriates who are institutionalized (whether in prison, seeking asylum, or in hospital), throw in persons with student visas (there were 300 in that category alone last year), Cabinet permissions, Snow Birds spending more than 6 months a year in their beachfront condos, and some over stayers), it appears clear that there are more than 36,000 non-Caymanians “living” in Cayman.

If we add back in the reported 36,705 Caymanians, the number of residents may have already passed 72,000 in the last year. It is perhaps helpful to note that ICTA has reported there being 103,274 local cell phones in 2018. Certainly, some persons have more than one cell phone, but thousands (including young children) have none.

Informal indications (ranging from traffic to the availability of rental properties and the increasing height of Mount Trashmore) are that the population (and number of residents) has continued to grow this year.

Part of the reason for the disparity in numbers provided by the ESO, and those provided by The Department of Immigration (now WORC), is the methodology used by each. Persons who intend to leave the Cayman Islands within 6 months are simply not counted by the ESO, but are counted by WORC.

Accordingly, although persons are in fact resident for immigration purposes, they do not necessarily form part of the population for statistical purposes. That is understood to be entirely consistent with international standards. Those standards may not always be relevant to our domestic considerations, in particular given the very large transient workforce and the reality that (at least historically) when work permit holders leave, they tend to be replaced immediately by another work permit holder.

The result is that whilst statistically we had a population of 65,813 at the end of last year, the number of people living here was greater. We may now already have as many as 75,000 residents using our roads, sewerage systems, garbage facilities and other infrastructure.

If true, we have no need to wait 10 years to find out 100,000 people physically in Cayman looks (and feels) like.

This winter, a good cruise ship day, coupled with high hotel and condo occupancy (we had 6,720 rooms available at the end of last year) will (at least momentarily) push the total number of people physically present in the Islands above 100,000.

Even then, the number of residents will of course be less, and the population smaller still. The detail will depend on who is asked, on what day and why, and the statistics.

Both the same, right? Under the Immigration Law of the Cayman Islands, seemingly not. Unexpected twists and pitfalls await the unwary.

Through decades of tweaking we now find ourselves in a position whereby there are (by our estimation) eight types of Permanent Residence in these Islands (not including The Right to be Caymanian which carries with it many of the fundamental attributes of Permanent Residence, or the various persons granted permission to remain by the Cabinet).

First is that which has been headline-grabbing in recent years, Permanent Residence on the basis of the now (in)famous points system.

Then there is that available to the spouses of such persons (as a Dependant).

Then there is that available to the spouses of Permanent Residents who have applied, on the basis of marriage, for their own Residency and Employment Rights Certificate on the basis of Marriage.

Then there is that available to the children of Permanent Residents following their reaching the age of 18.

Then there is that available to wealthy investors.

Then there is that available to their spouses.

Then (since 13 August 2018) there is that available to the spouses of Caymanians.

The above are all available in consequence of applications made to Workforce, Opportunities and Residence Cayman (“WORC”) under the Immigration (Transition) Law. Each has differing attributes and requirements. Some require annual fees and Annual Declarations, others do not. Some require investment in real estate (and for it to be maintained), others do not. Some restrict the right to work, others prohibit it, and others do not.

Notwithstanding complications and occasional confusion arising from the sheer variety available, the system fundamentally works. Those holding the various types of Permanent Residence outlined above do have one thing in common. They are all able to present their passports to the Immigration Authorities and to receive within it a stamp confirming that the holder of the passport is a Permanent Resident of the Cayman Islands (with or without the Right to Work).

Lastly, there is Permanent Residence available to persons who are Registered as BOTC’s by Registration by Entitlement under the British Nationality Act. Registration by Entitlement is in consequence an application made to the Deputy Governor’s Office that can be made by (or on behalf of) any child who was born in the Cayman Islands and remains a resident until their 10th birthday. These applications do not arise under Cayman Islands domestic legislation. There is no basis to deny such an application, if made by a qualified applicant. There is no need for either parent of the child to be Caymanian, a Permanent Resident, or a BOTC. Simple birth and residence here for the first 10 years of an applicant’s life (together with completing a form, supplying supporting documents, and paying relatively nominal fees) is all that is required.

Our Immigration (Transition) Law (like the Immigration Law before it) clearly confirms that these children have “the Right to remain Permanently in the Islands.” Nevertheless, any attempt by them to obtain a stamp in their passport confirming their right to remain has in our experience been refused. The Authorities contend that the Right to Remain and the Right to Reside are different things. This has been the case for some years and no solution seems imminent. Meanwhile the number of children eligible for confirmation of their “Right to Remain” immigration status in their passports continues to grow.

Those studying our laws governing residence and immigration will note that (appropriately, if they are to have its desired effect of allowing the People of the Cayman Islands to manage the growth of the Permanent Population of these Islands) Term Limits are set at 9 years. Nevertheless, due to numerous loopholes and delays there is no shortage of children who were born here and are still here on their 10th birthday. Their right to Permanent Residence (however described) is appropriate and enshrined within our own Law.

If only they could be given a stamp in their passport, then they could confirm their status in these Islands and freely demonstrate it.

This article can also be seen in The Journal – March 2019 issue.

HSM’s Immigration team explores the immigration issues that exist in the Cayman Islands between Caymanians and British Overseas Territory (BOT) Citizens.

Passports seem to have originated as a document authorising persons to pass through “the gate” of a medieval city. Times have moved on and (at least according to Wikipedia) passports today are a “travel document usually issued by a country’s government that certifies the identity and nationality of its holder primarily for the purpose of international travel.”

Great in principle, but not accurate in the Cayman context.

Cayman Islands passports are neither issued by the Cayman Islands government, nor do they (usually) confirm the nationality of the holder. They are travel documents certifying the identity of the holder and are used for international travel. Everyone lawfully issued a “Cayman Islands Passport” is a British Overseas Territories Citizen by virtue of a connection with the Cayman Islands.

They may or may not however be Caymanian, and unless the immigration authorities place a stamp in it confirming the bearer to be a Caymanian, the passport itself is not determinative of whether or not the holder is Caymanian. Even persons who hold Cayman Islands passports and were born and have always lived in the Cayman Islands may not be Caymanian.

Even more confusingly, many British Overseas Territories Citizens by virtue of a connection with the Cayman Islands have no inherent right to live and work in (or even enter) the Cayman Islands, even if they have been British Overseas Territories Citizens (automatically) from birth. These will include children born in the Cayman Islands today to parents who hold Permanent Residence (whether or not they are also themselves British Overseas Territories Citizens).

According to the Cayman Islands Immigration Law, the only time a British Overseas Territories Citizen has any inherent right to live in the Cayman Islands by virtue only of their passport is if they became a British Overseas Territories Citizen by registration by entitlement under the British Nationality Act.

Such persons are persons who were born without British Overseas Territories Citizenship in the Islands and, having lived here for the first 10 years of their life, then apply for such registration or, if born in the Islands, have a parent who subsequently becomes settled. Even then, if they work without a work permit, or move away for five years, their right to reside is lost.

Non-Caymanians who are born British Overseas Territories Citizens (i.e. can hold Cayman Islands Passports without having to apply for Registration by Entitlement under the British Nationality Act) have no inherent right to reside or work in the Cayman Islands.

All of this creates an enormous conundrum for all manner of Departments of the Cayman Islands Government. There does not appear to be any uniform or consistently applied mechanism for distinguishing Caymanians from non-Caymanians and (particularly since having a Cayman Islands Passport and being born in the Cayman Islands are often irrelevant considerations to the question of whether or not someone is qualified to (for example) register to vote or obtain a stamp duty waiver as a first time buyer), the risk of arbitrary (and incorrect) determinations is significant.

The Immigration Regulations provide that the holders of Cayman Islands Passports need not fill in landing cards. It is ironic that Caymanians not travelling on a Cayman Islands Passport (many Caymanians do not have one, and some may not even be entitled to obtain one) have to complete landing cards whilst hundreds (or even thousands) of non-Caymanians with Cayman Islands Passports are exempt.

A Gordian Blade is available to the authorities to resolve this longstanding issue through minor changes to the Immigration regime. All that seems required is the will to wield it.

This article can also be seen in The Journal – February 2019 issue.

HSM’s Immigration team explores The Immigration (Amendment) Law, 2018 (“the Amendment Law”) that came into effect on 13 August 2018, and following this passage, new opportunities present themselves for persons who are married to a Caymanian and hold (or are seeking) Residency and Employment Rights Certificates as the spouse of a Caymanian.

According to documentation recently received from the Department of Immigration there are approximately 350 expatriates holding Residency and Employment Rights Certificates (RERC’s) as the spouse of a Caymanian. We expect this number will increase.

Unlike the RERC’s awarded to Permanent Residents, the RERC’s awarded to the spouse of a Caymanian were not previously permanent in nature. They only lasted for 7 years and the holder either had to seek the Right to be Caymanian (on the basis of 7 years’ marriage to a Caymanian) or seek to renew their RERC prior to its expiry.

Until the spouse of a Caymanian became Caymanian, they could not be said to be free from any immigration restriction on the period they are permitted to remain in the Islands given the 7 year period of validity of their RERC. This meant that they were unable to be naturalised or obtain a Cayman Islands passport during that 7 year period.

Cayman Islands Passports are only available to persons who hold British Overseas Territories Citizenship (“BOTC”) by virtue of a connection with the Cayman Islands. The process for being, or becoming, a BOTC of the Cayman Islands is set out in and governed by the British Nationality Act. That Act has at all relevant times required applicants for Naturalisation to have been resident in the Territory for a minimum of twelve months’ “free from Immigration Restriction for the period for which they may remain” prior to becoming eligible to apply for Naturalisation.

In contrast, the spouse of a Permanent Resident was able to seek Naturalisation a year after marrying a PR holding expatriate, and thereafter obtain a Cayman Passport. The result was that a spouse of a Caymanian was until very recently with the passing of the Amendment Law treated far less favourably. They would have to be married to a Caymanian for 7 years’, apply for Caymanian status on the grounds of 7 years’ marriage, obtain that status, and hold it for 12 months’ before being eligible to apply for naturalisation and thereafter, a Cayman Passport.

The Government has acted to ensure that a spouse of a Caymanian is subject to the same rules when seeking naturalisation and a Cayman Passport as the expatriate spouse of an expatriate PR holder. This change is welcomed and the authorities should be congratulated for making it.

The relevant amendment which came into effect on 13 August, has removed the 7 year expiry date on every RERC issued to a spouse of a Caymanian, in effect making their RERC Certificate indefinite in nature.

With no expiry date to their Certificate, a spouse of a Caymanian holding an RERC may now, provided they have held an RERC for no less than 12 months’ and have been legally and ordinarily resident in Cayman for no less than 5 years’, apply for Naturalisation on the Grounds of Residence. If they are married to a Caymanian, who is also a BOTC by virtue of a connection to the Cayman Islands and have been married and resident for 3 years’, an application for Naturalisation on the Grounds of Marriage to a BOTC can now be made.

This will greatly expedite the ability of a spouse of a Caymanian to seek and obtain Cayman Islands Passports and further, for them to thereafter seek registration as full British Citizens which, if granted, would enable them to hold full British Citizenship in addition to being British Overseas Territories Citizens.

Once the spouse of a Caymanian has been naturalised as a BOTC, they will be eligible to seek to become Caymanian on the basis of Residence some 5 years’ later or 15 years’ after first becoming Resident in the Cayman Islands, whichever is less. This is the mechanism by which most long term residents may become

Caymanian and is entirely consistent with the original intention of what started as the Caymanian Protection Law, that in order to be eligible to become Caymanian, applicants must first be British Subjects.

The ability of a spouse of a Caymanian to seek to become Caymanian relying on 7 years’ of marriage to a Caymanian (rather than on the basis of Naturalisation/Residence set out above) continues; although not least given issues that may arise following any breakdown of the marriage, prospective applicants for Caymanian Status may prefer (all other considerations being equal) to follow the Naturalisation/Residence route to becoming Caymanian rather than seeking status based on marriage.

Holders of RERC’s as a spouse of a Caymanian continue to enjoy unfettered access to the labour market and to be free to engage in any category of gainful occupation without having to pay annual fees.

The Government has elected to not require a spouse of a Caymanian to undertake any annual reporting requirements but given perceptions as to marriages of convenience and the potential for such spouses to be living apart, such provisions may need to be introduced in the future.

This article can also be seen in The Journal – November 2018 issue.

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