The Cayman Islands Government is seeking parliamentary backing to explore forming a sovereign wealth fund, as another major offshore financial centre considers how to turn unexpected revenue into longer-term prosperity.

André Ebanks, the Cayman Premier and Minister for Financial Services, plans to bring a motion when Parliament resumes on September 30 seeking authority to develop a detailed proposal.

The motion would not commit the Government to establishing or financing a fund. Instead, it would authorise research, consultation, due diligence and policy development.

Mr Ebanks said in a statement: “The premise is straightforward. A period of economic and fiscal strength is an opportunity to save for the future.”

Sovereign wealth funds allow governments to invest surplus revenues for longer-term objectives, which can include building reserves for economic downturns, meeting future liabilities and generating investment income.

Julie Hunter, parliamentary secretary for financial services and commerce, compared the principle with household savings.

She said in a statement: “We save when we are able to, and those savings compound and grow over time.

“A sovereign wealth fund is a way to pay forward the prosperity we enjoy today, while ensuring there are clear parameters for how the money can be utilised.”

The Cayman Government has not yet determined the proposed fund’s size, source of capital or investment strategy.

Diego López, founder and managing director of research and consultancy firm Global SWF, told the Cayman Compass that a savings fund with a stabilisation function would be the best model.

He said clear fiscal rules would be needed to prevent the money being quickly depleted during economic downturns.

Julian Morris, a Cayman-based economist, said the fund could ultimately help to meet unfunded liabilities including pensions and healthcare costs.

Cayman’s government ran a public-sector operating surplus of more than CI$252 million ($302 million) in the first six months of the year, according to unaudited accounts released in August. At June 30, Cayman carried government debt of CI$479 million and held cash and deposits of CI$589 million.

Bermuda has faced a similar debate since the introduction of its 15 per cent corporate income tax created the prospect of substantial new government revenues.

The November 2024 Throne Speech said additional CIT receipts could allow Bermuda to eliminate its national debt within ten years and establish a sovereign wealth fund for strategic investments.

By March 2025, David Burt, the Premier and Minister of Finance, said excess CIT proceeds would be placed in an independently managed sovereign wealth fund.

The proposal prompted questions over whether Bermuda should instead prioritise paying down its debt.

Economist Peter Everson told The Royal Gazette last year that the island should first achieve a genuine budget surplus and reduce its national debt before building a sovereign wealth fund.

“You’ve got to walk before you can run,” he said.

The Tax Reform Commission then recommended creating a stability fund for CIT receipts, alongside a goal of halving Bermuda’s debt within ten years.

The Government has since started directing a substantial portion of its new tax revenues towards debt reduction.

In February, Mr Burt announced that $605 million in CIT receipts would be used to repay government debt due in January 2027.

Cayman is at an earlier stage of the process.

If Parliament approves the motion next week, its government will start developing the details of a potential fund, including how it would be financed, governed and invested.