Biography

Michael Klein is a financial journalist at the Cayman Free Press, where he is working with the Cayman Financial Review, the Cayman Islands Business Journal and the Caymanian Compass. In the past he has been responsible for the Risk Management and Corporate Finance sections of a British monthly Corporate Treasury publication, for which he has also written various financial handbooks, notably on European Banking and Cash Management and the Debt Capital Markets. In addition, he has worked as a copywriter for banks and investment funds and runs his own public relations company in the UK and Germany. After starting his career as a media researcher and analyst, he served for several years as a corporate communications consultant to US and European blue chip companies with a leading global media analysis firm. Michael holds an MA in Political Science and International Law from the University of Bonn in Germany.

Article Title

International Financial Centre or Tax Haven - Is Nation Branding an Effective Option for the Cayman Islands?

Abstract

In recent years the Cayman Islands government and local private sector financial services organisations have increased their effort of countering what they perceive as "misperceptions" and "mischaracterisations" of the Cayman Islands as a 'tax haven' in international media.

The image or perception of the Cayman Islands as a 'tax haven' can significantly impact the local financial services industry and the local economy, as G20 and OECD-led initiatives have continuously raised the bar and cost for offshore financial centres with new tax and other regulatory compliance initiatives. In some cases, US companies have redomiciled from the Cayman Islands to other countries, citing, in addition to tax risks, the reputational risk of being based in a tax haven jurisdiction.

Cayman's government and financial services industry representatives prefer the term international financial centre or offshore financial centre over the term tax haven, because the latter is commonly used with a negative connotation, not least as a category in several black lists for non-compliant jurisdictions drawn up by the Financial Action Task Force, the Organisation for Economic Corporation and Development (OECD), the International Monetary Fund and individual countries.

This paper reviews existing academic research - specifically agenda setting, priming and framing theories - on the way opinions and perceptions are formed and influenced both through mass media and personal experience. This is followed by an analysis of how the tax haven issue has been covered between 2000 and 2011 in the press of the US, UK, France and Germany.

Based on these findings, the paper asks what the opportunities and limitations are for government and private sector organisations in the Cayman Islands to sway public opinion and change attitudes and perceptions of opinion leaders and decision makers abroad.

This includes an exploration of the concept of "nation branding," credibility issues, practical considerations of what influences the editorial agenda of traditional media and the question OF whether social media and the internet have changed the way mass media influence public opinion.