Because of the territory's strong economy and it being a popular banking destination for wealthy individuals and businesses, it is often dubbed the ‘financial capital’ of the Caribbean.

[8] The emergence of what is now considered the Cayman Islands' "twin pillars of economic development" (tourism and international finance) started in the 1950s with the introduction of modern transportation and telecommunications.

[7] 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.

The boom in the Cayman Islands' international finance industry can also be at least partly attributed to the British overseas territory having no direct taxation.

A popular legend attributes the tax-free status to the heroic acts of the inhabitants during a maritime tragedy in 1794, often referred to as "Wreck of the Ten Sails".

[9] The wreck involved nine British merchant vessels and their naval escort, the frigate HMS Convert, that ran aground on the reefs off Grand Cayman.

The largest sectors are "banking, hedge fund formation and investment, structured finance and securitisation, captive insurance, and general corporate activities".

Sir Vassel, who became the only Caymanian ever knighted in 1994, served as the Cayman Islands financial secretary from 1965 through 1982 and then as an Executive Council member from 1984 through 1988.

In his government roles, Sir Vassel was a driving force in shaping the Cayman Islands financial services industry.

[23] A report published by the International Monetary Fund (IMF), in March 2005, assessing supervision and regulation in the Cayman Islands' banking, insurance and securities industries, as well as its money laundering regime, recognised the jurisdiction's comprehensive regulatory and compliance frameworks.

The report further stated that "the supervisory system benefits from a well-developed banking infrastructure with an internationally experienced and qualified workforce as well as experienced lawyers, accountants and auditors", adding that, "the overall compliance culture within Cayman is very strong, including the compliance culture related to AML (anti-money laundering) obligations".

[24][25] On 4 May 2009, the United States President, Barack Obama, declared his intentions to curb the use of financial centres by multinational corporations.

[28] In 2013, the Cayman Islands was ranked by the Financial Secrecy Index as the fourth safest tax haven in the world, behind Hong Kong but ahead of Singapore.

Under the UK Sanctions and Anti-Money Laundering Act of 2018, beneficial ownership of companies in British overseas territories such as the Cayman Islands must be publicly registered for disclosure by 31 December 2020.

Unspoiled beaches, duty-free shopping, scuba diving, and deep-sea fishing draw almost a million visitors to the islands each year.

Health City Cayman Islands, opened in 2014, is a medical tourism hospital in East End, led by surgeon Devi Shetty.