A permanent lifestyle or business move
This class of island attracts the world’s wealthy who seek a more permanent move, whether to take advantages of the local tax regime, lifestyle, or for business. Bermuda, the Bahamas, the Channel Islands, Antigua, British Virgin Islands, the US Virgin Islands and the Isle of Man all come under this category. Self-governing, "low tax jurisdictions", they offer low levels of personal taxation and generally no capital gains or inheritance taxes (see Table 3 below). Economic activity in these islands is dominated by professional financial services, which accounts between a third and half of GDP, bringing with it highly paid jobs and attracting residents relocating for business and employment.
These islands have strong links to city markets (Channel Islands to London, Bermuda to New York, for example), feeding both financial capital and property buyers. They share some characteristics of city real estate markets and can be safe havens during global economic unrest. A high exposure to the financial services sector has left some of these islands exposed to changes in the financial services landscape. The wider international regulatory regime and general clamp down by western governments on tax avoidance also threatens those islands whose only raison d’être is tax.
In light of this, these islands are diversifying their financial services offer and also developing other areas of industry. In Cayman, for example, where finance contributes 55% of the island’s GDP, "Health City", is being developed, a medical tourism facility aimed at providing affordable healthcare to the US and Canadian market. It has also established "Cayman Enterprise City", a special economic zone planned to attract new technology, finance and education investment.