The Cayman Islands consistently earns top marks from sophisticated investors. Stable institutions, a respected land registry, no income or capital gains tax, and direct airlift from New York, Toronto, and London — it checks most of the boxes. A June 2026 survey from Baker Tilly reinforced that point: Cayman is one of only five Caribbean destinations where both banks and non-bank financiers — private equity, family offices, and similar capital — feel confident enough to fund new hospitality and real estate projects.
We are based here. We are invested here. So we pay attention. And what we are watching right now deserves a candid conversation.
The Case for Cayman — Still Intact
The Baker Tilly Caribbean Hospitality Financing Survey is worth reading. When financiers were asked which jurisdictions they preferred, Cayman came up repeatedly. Stability — not just political, but legal and institutional. Courts work. Property rights are enforced. Air connectivity: total inbound airlift from the U.S., U.K., and Canada for April 2026 was up 15.1% year-over-year. A strong land registry, cited unprompted by multiple respondents. And track record: “We know the jurisdiction and we have seen the performance.”
On crime, Cayman continues to stand apart from the region. Its 2023 murder rate was 5.6 per 100,000 — against 43.85 in Jamaica, 38.93 in Honduras, and 32 in the Bahamas.
The Concern Forming on the Horizon
A report tabled before the Cayman Islands Parliament this week — from the Auditor General — laid out a spending pattern that should give investors pause.
Public sector payroll rose from $521 million in 2020 to $712 million in 2024 — a 37% increase in four years. Headcount grew from 6,900 to just under 7,900. The average total remuneration package for a public sector worker increased 20% to $90,000 annually, including government-paid healthcare and pension with zero employee contribution. Between 2018 and 2023, government expenditure rose 51% while revenue grew just 25% — a 2:1 divergence. In 2024, more than half of total government spending went to staff costs alone.
The government announced a hiring freeze in September 2025. Headcount still grew by 287 employees over the course of that year. The Water Authority spent approximately $1 million on Christmas gifts over five years — roughly $1,200 per employee per year. The Auditor General concluded that this trajectory poses “a risk to the Government’s long-term financial sustainability.”
What This Means for Investors
Cayman is not in crisis. Its legal and regulatory infrastructure remains intact. But the lesson from every jurisdiction that has gradually eroded its fiscal position is the same: the deterioration does not arrive as a single shock. It accumulates. Infrastructure falls behind. Taxes get introduced. Fees go up. The environment for long-term capital becomes incrementally less hospitable — often before investors who arrived early realize what has changed.
Cayman’s hospitality financiers flagged “outdated infrastructure” as a top concern. That concern does not exist in isolation from fiscal capacity. One in four Caymanians now works in the public sector. A government payroll of this scale — with benefits largely insulated from market discipline — creates a political constituency that is difficult to reform.
Our View
We chose the Cayman Islands deliberately. The legal framework, the financial infrastructure, the talent base — all of it works for what we are building. We are not reconsidering that view. But we are watching. And we think serious investors should do the same.
We are investors who consult on what we own. Part of what we owe our members and partners is honesty about the full picture — not just the things that validate the investment thesis, but the things that could complicate it. Cayman remains one of the most compelling long-term environments in the region. We will stay, and deepen our presence here. But we will do so with clear eyes.
Sources: Baker Tilly 2026 Caribbean Hospitality Financing Survey; Cayman Islands Auditor General’s Report on Public Sector Remuneration (tabled June 2026); Cayman Compass, June 24–25, 2026.