Tanya McCartney argues that The Bahamas' strong regulatory regime and its historic determination to ensure its integrity as an international financial centre, as evidenced by its most recent commitments, reflect the mindset of a jurisdiction focused on protecting and cultivating its key assets. Regulation, as it relates to international initiatives, is the canvas upon which The Bahamas' wealth management expertise, innovative client-centric products and services and unique geographic tropical location combine to make it an increasingly clear choice for institutions and individuals seeking a premier provider of financial services.
International financial centres such as The Bahamas play an important role in the global economy. Its very nature of being an effective and neutral environment has resulted in it developing to accommodate international trade. Jurisdictions such as ours create a global environment conducive to foreign direct investment, job creation and global economic development.
The Bahamas is one of the world's leading jurisdictions for legitimate financial services.
For many, banking and wealth management outside of one's home country is simply good business and wise investing for several reasons:
- Multi-national and multi-generation families and family businesses find that siting some of their assets in a strong trust law jurisdiction is appropriate for long term preservation and transmission of wealth.
- Keeping assets in a jurisdiction less exposed to expropriation, capital controls, and civil unrest is an excellent risk mitigation technique, particularly if one's home country has a history of political or financial instability.
- International banking and wealth management centres may possess superior products and services, compared to what is available domestically.
Considering the various international initiatives impacting financial centres such as The Bahamas it is imperative that we articulate our legitimacy as a responsible, well- resourced, compliant international financial centre focused on real international business with economic substance and committed to the highest possible standards of service delivery, transparency and cooperation.
A SHARED COMMITMENT
Financial services are the second most important industry in The Bahamas after tourism. Successive governments have recognised the importance of financial services to country's continual economic and social development. The industry's viability therefore is a demonstrated priority of both the public and private sectors, evidenced by:
- The responsiveness of legislative and regulatory solutions to market needs and demands.
- The swiftness with which these tools can be utilised.
- Consistency in the regulatory balance of ensuring the integrity of the industry while underpinning factors conducive to industry competitiveness.
- A government Ministry dedicated to Financial Services.
- Shared commitment in the promotion and development of the industry, distinctly, the Bahamas Financial Services Board (BFSB), funded by both the private industry and the Government of The Bahamas The Bahamas Financial Services Board (BFSB), launched in April 1998, represents an innovative commitment by the financial services industry and the Government of The Bahamas to promote a greater awareness of The Bahamas' strengths as an international financial centre.
FISCAL AND ECONOMIC STABILITY
A 2018-year end mission by the IMF reported: "The the Bahamian economy continues to recover, with real GDP growth projected to reach 2.3% in 2018 and 2.1%in 2019"; and "The Fiscal Responsibility Law (FRL) will support the government's efforts to secure fiscal sustainability and put debt on a downward path."
The mission's report also noted:
- "The team welcomed the government's transparent recognition of accumulated arrears and the budgetary provisions to clearing them, as well as the plans to put in place robust expenditure control systems."
- "The banking system has strong capital and liquidity ratios, and banks have made progress towards improving asset quality."
- "The mission welcomed the government's firm commitment to a well-regulated international financial and business sector, and recognised the significant steps taken to increase compliance with international standards on Anti-Money Laundering."
TAX NEUTRAL, NOT A TAX HAVEN
The financial services sector in The Bahamas has been impressively resilient and progressive amid the continued and sometimes challenging evolution of the global industry. In years past, "offshore" often seemed like a tainted word, given the attraction in considerable proportion, of tax avoiders and proceeds from illicit activity, to the world's international banking and trust business centres.
An era which unfortunately still sometimes casts a shadow on the continuing success and tremendous growth of legitimate business in private banking and wealth management, in well-regulated regimes like The Bahamas, where such practices have largely disappeared.
The jurisdiction has been and remains demonstrably and effectively unwelcoming to those seeking to engage in questionable and illegal activities. The Bahamas remains committed to a tax neutral platform which is defined as an environment in which profits and gains arising here are not taxed there, but where tax liabilities in other jurisdictions are not reduced.
COMMON LAW JURISDICTION
The legal system in The Bahamas has been successful in facilitating a legislative environment that is effectively responsive to changes in market needs and demands, while also offering the certainty of common law.
As an independent nation with a financial services industry bolstered by a strong public-private sector partnership, legislative change in The Bahamas is efficient and timely in its responsiveness to the market shifts.
As a member of the Commonwealth of Nations, The Bahamas is a common law jurisdiction, with a legal system based on the system of England. The ultimate court of appeal for judgements issued by Bahamian courts is the Privy Council. This combination of advantages affords the jurisdiction a special balance to its legal identity.
THE BAHAMAS ADVANTAGE
It is not by chance that The Bahamas is the most successful international financial centre in the Caribbean today. More than 80 years of thought, effort and co-operation have produced ideal conditions for (Ultra) High Net Worth individuals, families and businesses to manage their wealth efficiently in comfort and style.
The country's mature financial services industry, established infrastructure, progressive government, tax neutral environment and luxury lifestyle have all been carefully cultivated to satisfy the specific needs of this most exclusive clientele. The many advantages of doing business in The Bahamas are as clear as the crystal waters surrounding the 700 islands of the archipelago:
Strategic location. The Bahamas is situated at the Crossroads of the Americas, just 65 miles off the east coast of Florida. It is an ideal hub for regional investment and business in the Eastern United States and Canada, and much of Central and South America.
Political and economic stability. The Bahamas has an outstanding record of political and economic stability, progress and stewardship. With more than 280 years of uninterrupted parliamentary democracy, It has been an independent nation since 1973, and retains a Westminster-based system of Government and an English-based legal system.
Wealth and asset management options. The Bahamas offer owners of capital a broad choice of financial institutions that deliver myriad services including banking, private banking and trust services, investment fund administration, capital markets, investment advisory services, accounting and legal services, e-commerce, insurance and corporate and shipping registries.
Physical resources. The Bahamas has developed its land, premises and fit-for-purpose infrastructure with the singular focus of facilitating international business.
Human capital. The Bahamas has a highly educated local workforce and a long tenure in financial services excellence which has created a deep pool of skill and experience that is recognised and trusted worldwide.
Investment policy and incentives. The Bahamas is committed to building an environment in which free enterprise can flourish.