India among top recipients of remittances from Cayman Islands

NEW DELHI: Cayman Islands may be widely known as a 'tax haven' and a major route for overseas investment flows, but India has surprisingly emerged as a top destination of 'worker remittances' from that British Overseas Territory.

An estimated $2.5 million has been sent via worker remittances to India by Cayman Islands licenced entities since 2011, according to official data released by CIMA, the primarly financial services regulator of the offshore financial centre situated in the Caribbean sea.

These remittances came through over 3,500 transactions. As per Reserve Bank of India's Liberalised Remittance Scheme, resident individuals may remit up to $125,000 per financial year (April-March) for any permitted capital and current account transactions or a combination of both.

The Cayman Islands economy is mainly fuelled by tourism sector and financial services sector. These two together represent 70-80 per cent of the country's GDP.

Jamaica is the top recipient of remittances from Cayman Islands by a wide margin as it received over $350 million between 2011 and March 2014. It is followed by Philippines, Honduras, United States, Dominican Republic, Nicaragua, Columbia, Guyana, among others. These have received remittances in the range of $2-20 million each fiscal.

The data has been collected by Cayman Islands Monetary Authority (CIMA) from about half a dozen licenced Money Service Providers (MSPs).

Cayman Islands is among nations that are in the radar of Indian regulators as these tax-neutral destinations are often used for round-tripping Indians' money back into the capital market in the form of overseas funds.