The economy of the Cayman Islands, a British overseas territory located in the western Caribbean Sea, is mainly fueled by the tourism sector and by the financial services sector, together representing 70-80 percent of the country's gross domestic product (GDP).
The emergence of what are now considered the Cayman Islands' "twin pillars of economic development" (tourism and international finance) started in the 1950s with the introduction of modern transportation andtelecommunications.
- From the earliest settlement of the Cayman Islands, economic activity was hindered by isolation and a limited natural resource base. The harvesting of sea turtles to resupply passing sailing ships was the first major economic activity on the islands, but local stocks were depleted by the 1790s. Agriculture, while sufficient to support the small early settler population, has always been limited by the scarcity of arable land. Fishing,shipbuilding, and cotton production boosted the economy during the early days of settlement. In addition, settlers scavenged shipwreck remains from the surrounding coral reefs.
- The Cayman Islands' tax-free status has attracted numerous banks and other companies to its shores.More than 40,000 companies were registered in the Cayman Islands as of 2000, including almost 600 banksand trust companies, with banking assets exceeding $500 billion. Large corporations based in the Cayman Islands such as Semiconductor Manufacturing International Corporation (SMIC). The Cayman Islands Stock Exchange was opened in 1997.Tourism is also a mainstay, accounting for about 70% of GDP and 75% of foreign currency earnings. The tourist industry is aimed at the luxury market and caters mainly to visitors from North America. Unspoiled beaches, duty-free shopping, scuba diving, and deep-sea fishing draw almost a million visitors to the islands each year. Due to the well-developed tourist industry, many citizens work in service jobs in that sector.