2012 saw the launch of Cayman Enterprise City, a knowledge-based special economic zone in the Cayman Islands. The concept touted as a future pillar of Cayman’s economy started to become a reality after the government of the Cayman Islands launched the Special Economic Zone Authority in February 2012 to licence and regulate the zone.
Since then more than 40 companies have joined the zone and for 2013 more than a hundred are in the pipeline, according to Cindy O’Hara, chairman of Cayman Enterprise City.
“It was an incredible year for Cayman Enterprise City,” says O’Hara. “CEC had a soft launch last February and got off to a flying start.” Since its launch, CEC has made good traction and managed to attract a number of new international companies to the zone already, with a growing sales pipeline, she notes.
The company initially concentrated on developing its global channel partnership network, which now counts over 140 channel partners in more than 20 countries, referring business to CEC from their client base.
“We have focused on key geographic markets including Silicon Valley, Toronto and New York City and this has resulted in us signing up 43 companies in 2012, who have either already set up operations in the Zone or are going through the SEZA licensing process. In addition, we currently have over 130 active sales prospects who are interested in relocating to the zone, so after a measured start, we are delighted with our results this year,” says O’Hara.
CEC also expanded its zone buildings and helped the first active companies to set up in its gateway locations at HSBC House, Grand Pavilion and Breezy Castle. Many of the zone companies are in the Internet and technology sector, as well as a number in the commodities and derivatives and media sectors.
US and Canada are the regions where Cayman Enterprise City is seeing most of the demand, predominantly from companies wanting to not only structure more efficiently with regard to taxation, but also to benefit from Cayman’s pro-business regulatory environment.
“Many companies are finding international regulation to become more restrictive and see CEC as the ideal location from which to operate their international businesses,” O’Hara says.
Canada, in particular, is predicting economic growth and CEC plans to market heavily to this region in 2013, along with the United States and selected European countries.
“Whilst it would be easy to try and be ‘everything to everybody’ and go after the European market and Latin America, we are focussed on solid organic growth. We are continuing to attract companies within the North American markets, since geographically we are just across the pond from them and there are no language or time-zone barriers,” she explains.
The focus of the growing marketing efforts will be campaigns primarily in the technology and commodities sectors. “We have a rolling road show of business development trips planned for 2013, which will further expand our global channel network and keep the flow of clients from the US and Canada coming into our sales pipeline.”
To support these marketing initiatives CEC’s business development team continues to grow.
“We took on another seasoned business development professional late last year, and we expect to continue to hire throughout 2013 as the business expands,” O’Hara says.
Developing the service offering is one of the main objectives for Cayman Enterprise City this year, she adds.
“It is our intention to develop the best Special Economic Zone in the world and our client services team are working hard to develop a seamless VIP service for all CEC clients.”
The actual development of CEC’s parks and facilities is planned once the number of registered companies has reached a critical mass.
“We have some exciting and ambitious plans to develop state-of-the-art facilities for companies and employees in the Zone, and initial planning for this is already under way. We are also developing some excellent relationships with a number of large brands who we expect will partner with us as part of the creation of the CEC data-centre facility.”
O’Hara is open about some of the delays and challenges that Cayman Enterprise City experienced during its first active year. “We are a startup, and let’s be honest, every startup experiences challenges as they establish and grow their business, which they learn from along the way. A major challenge has been trying to market to the world and you will see a much more focused marketing effort in 2013, with carefully targeted industry specific sales and marketing campaigns focussed on the most important geographic markets.”
Nonetheless, she says, CEC has achieved a huge amount very quickly, with the development of laws and regulations needed by Cayman Enterprise City in 2011 and the launch of its sales and marketing efforts, and welcoming the first new companies to Cayman and CEC in 2012.
“In 2013 we will build on what we have learned to consolidate our business success and continue to grow and attract new business to Cayman.”
One advantage for the companies registered in the zone is that they are insulated from potential fee increases and also operate unimpeded by any domestic political developments.
“The recent political changes demonstrate once again the commitment that the Cayman Islands have to the democratic process and to governance that is larger than any individual,” says O’Hara. “One of the frequently cited reasons for our current and potential tenant companies to choose Cayman over other jurisdictions is our standing as a well-respected major financial centre, with strong anti-money laundering and KYC standards and procedures. Whilst the political sphere will always have its ups and downs, CEC’s standing in law and statute, operating under an OECD approved Special Economic Zone model, ensures the Zone’s long term validity, security and success, no matter the political ‘winds of change’.”
Ultimately, once fully operational, CEC is expected to contribute over US$500 million to Cayman’s economy in direct, indirect and induced economic impact.
“We are already seeing some of these benefits begin to take shape, and we look forward to this pro-business initiative that is Cayman Enterprise City continuing to deliver for the long-term strength, diversity and success of our Cayman Islands.”