New law tabled, preferring locals over expatriate investors

Durrant Pate/Contributor

Caymanian authorities have tabled the proposed Local Companies (Control) (Amendment) Bill, which marks a significant shift in the business environment for foreign-owned businesses operating in the Cayman Islands. 

The Bill, published in June 2026 and scheduled for parliamentary debate, would empower the Cabinet to suspend the issuance of Local Companies Control Licences to foreign-owned businesses, either broadly or within specific industries. Cayman’s Premier, Andre Ebanks, has framed the measure as a modernisation of 1970s-era legislation that no longer reflects Cayman’s economic maturity, arguing that a skilled Caymanian workforce now exists to fill roles previously requiring expatriate enterprise. 

While no immediate widespread restrictions are anticipated, the discretionary and open-ended nature of the proposed power itself is a source of uncertainty for internationally oriented investors. The political pressures driving the bill are deeply rooted and unlikely to dissipate. 

Early implementation targets real estate sector

The real estate sector will bear the brunt of early implementation, given its political salience and limited systemic importance to the broader economy. The government has explicitly identified property development as a priority area, reflecting voter grievances over housing affordability and the visible dominance of expatriate-owned enterprises in a market directly linked to the cost-of-living pressures that dominated the 2025 election campaign. 

Global insight company, BMI, which is a subsidiary of Fitch Solutions, does not expect the legislation to trigger sweeping intervention across the broader economy over the next two years, with the financial services sector in particular, well insulated by the government’s own fiscal dependence on it. Unlike the financial services sector, which accounts for over 30% of Gross Domestic Product (GDP) and the large majority of government fee revenue, real estate presents a lower-risk target for intervention. 

BMI argues that a moratorium on new foreign-owned property development licences would be politically popular, economically sustainable in the near term and difficult for international investors to challenge given the discretionary framing of the legislation. In addition, the structural incentives for any administration to protect the offshore financial centre model are too strong to allow aggressive application of licensing restrictions in that sector. 

Early signal of broader political direction 

However, investors should treat the bill as an early signal of a broader political direction rather than a one-off measure. 

As the ruling National Coalition For Caymanians (NCFC)  coalition approaches the next general election, due in 2029, campaigning pressures are likely to intensify demands for more visible ‘Caymanianisation’ outcomes, raising the risk that the scope of intervention gradually widens beyond real estate into other sectors where expatriate-owned businesses are perceived to be crowding out Caymanians participation.

The non-Caymanian share of the population has risen to a record 54.7% in 2025, up from 43.3% in 2016, as rapid economic growth has drawn a large expatriate workforce into financial services and hospitality. Housing costs have become the primary cost-of-living grievance among Caymanian voters, and all three parties in the NCFC coalition campaigned on pledges to improve economic opportunities for Caymanians and moderate immigration. 

A non-binding referendum held alongside the April 2025 election, which rejected cruise berthing infrastructure development, further illustrated the direction of public sentiment toward prioritising quality of life over unconstrained growth.