The use of term limits to regulate expatriate populations is nothing new. In Bermuda, the work permit term limits policy was implemented on 31 March 2001, and in the Cayman Islands, on 31 December 2003.

In both jurisdictions however, the effect is only becoming widely felt now.

Both Cayman and Bermuda have for some time suffered a shortage of local individuals to fill the diverse and often specialised positions available in their rapidly growing and diversifying economies.

The result has been an influx of expatriate workers, many of whom have remained for extended periods.

Despite strict work permit requirements that made it clear that the grant of a work permit did not confer any expectation of renewal, or for example, conferred a condition that steps be taken to ensure that a local person replaced the permit holder within a reasonable period, a sense of entitlement to remain indefinitely developed in some sectors.

Indeed, in both jurisdictions, many long-term permit-holders were given permanent security of tenure by Working Resident's Certificate (1998) and grant of Permanent Resident's Certificate (2002) in Bermuda and of citizenship in the Cayman Islands in 2003.

Neither community is able to indefinitely absorb continuing mass long-term immigration.

In order to discourage the expectation of permanent residency rights (and to make clear at the earliest stage), consideration had to be given to control and monitor the grant of work permits for extended periods.

With added speculation of human rights provisions requiring the grant of citizenship to persons resident more than ten years, and political pressure mounting, both jurisdictions adopted the term limits solution.

While there are some significant differences in approach as the table on this page sets out, the similarities between the sister jurisdictions are striking.

Now each overseas territory watches the other again as the tightrope of implementation is walked between the needs of each jurisdiction's booming offshore business sector, and the expressed concerns of much of the local populace.

Inhibiting long-term residency and dispelling the expectation of permanency may be achieved in other ways, but for the moment term limits are a fact of life and they will ultimately limit the appeal of both jurisdictions to potential expatriate workers.

If there were sufficient workers to fill the jobs of expatriates, term limits would not pose a problem but as it is attracting the best of the world's talents to our shores suddenly becomes a whole lot harder.

n Attorney E. Kelvin Hastings-Smith, FCIArb, is Counsel and Manager of the Litigation Practice Group at Appleby in Bermuda. Partner Nicolas Joseph is Head of the General Litigation Practice Team at Appleby in the Cayman Islands. A copy of this column can be obtained on the Appleby website at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.