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New laws keep Bahamas ahead
WHAT-TO-DO - NASSAU, CABLE BEACH & PARADISE ISLAND - JULY 2005
New laws keep Bahamas ahead
More ways to invest
The Bahamas continues to gain ground in financial services. Through a number of new laws, the government has shown its commitment to maintain the country's reputation as a well-regulated, blue-chip jurisdiction with all the services investors have come to expect from one of the world's premium financial centres.
To financial companies operating in The Bahamas, the new laws confirmed the government's determination to work with them to expand the industry. In fact, industry professionals played a key role in the legal changes. They requested most of them and then helped to write them. The resulting improvements satisfied both commercial and civic needs and made investing easier and more profitable than ever.
"Through its new legislation, the country is sending a message to foreign investors - actual and prospective - that The Bahamas continues to roll out the welcome mat,? said Sean McWeeney, a leading trust lawyer and former Attorney- General of The Bahamas.
The legislative updates, which include a Foundations Act, a Purpose Trust Act, a Segregated Accounts Act, amendments to the International Business Companies Act and the Perpetuities Act, provide new and improved products to investors and secure The Bahamas' position at the forefront of an increasingly sophisticated financial services marketplace.
Cooperation
Close and continuous cooperation between the government and private sector has made sure clients' voices are heard.
When international agencies such as the Organization for Economic Cooperation and Development (OECD) and its Financial Action Task Force (FATF) demanded new laws and regulations to aid the search for money-launderers and drug traffickers, including the sharing of client's personal information, The Bahamas had to act quickly. The country?s legislators had to ensure transparency without destroying its tradition of client confidentiality. The result was a stronger legal and regulatory structure that still protected the client?s personal information.
The Bahamas was one of the first countries to address the threat of terrorism financing, passing an anti-terrorism bill immediately after the September 11, 2001, attacks on the US.
The new structure changed the country's approach to investors and meant it would have to target a broader range of customers. The legislative changes represent the country's determination to provide support for investors at the ground level. Representatives from government and industry, including financial service companies from all over the world, are working together to create an ideal investment environment as inviting as the physical one.
That cooperation is evident in the success of the Bahamas Financial Services Board (BFSB), whose work with the Ministry of Financial Services and Investments has included the implementation of an internet platform for the establishment of companies and to explain recent legislative changes.
BFSB members include representatives from a wide cross section of the financial services sector. Its executives and member companies have a direct line to regulators and policy makers. They exchange concerns along with new ideas and suggestions for improvements.
"Market sensitive legislation, as represented by recent initiatives and those which will inevitably be introduced in the future, sends a strong message that we intend to continue to remain a premier international financial centre," says Wendy Warren, the BFSB's chief executive.
The goals behind last year's legal changes are just as important as the new products they have created. Investors wanted new tools and were asking for more features on some of the most popular financial structures and The Bahamas responded. The new laws are all part of the country's long-term commitment to act on market opportunities and maintain its reputation in one of the most aggressive industries.
"While the recent legislative changes indicate the degree to which the jurisdiction is being proactive and certainly position the business environment favourably now and for the long term, our true mettle as a jurisdiction will be demonstrated in our ability to stay ahead of the market with further changes or additions to our business and legislative environment as they are required," Warren said.
For investors already taking advantage of The Bahamas' wide range of products, the new laws prove the country's commitment to their concerns.
"In terms of what the international investors' community has articulated, I' not aware of any discussion or concern that has not been answered," McWeeney said. "They have been waiting on protective cell companies, foundations and purpose trusts and we have done all that. I don't think there's anything missing now."
International concerns
The rules of international finance are evolving while the pressure to keep up with changing political, economic and social standards remains constant. The Bahamas continues to balance the challenges of international aggression in an increasingly demanding market.
The country's financial service laws and regulatory structure are fully compliant with the current standards of the Basel Committee on Banking and the International Organization of Securities Commissions standards on securities. It has met the provisions of the Vienna Convention Against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances.
In a report titled The Bahamas: Assessment of the Supervision and Regulation of the Financial Sector - Review of Financial Sector Regulation and Supervision, the International Monetary Fund praised the country's regulatory improvements and dedicated financial services community.
The reported stated: "There has been very substantial progress towards the development of an effective regulatory regime in The Bahamas over the past two years. This has been reflected not only in the body of legislation that was enacted in December 2000 but also in the structural and operational arrangements put in place by the agencies that have been entrusted with supervisory responsibilities."
The IMF said the progress made by the country's regulators was impressive, "due in large part to strong leadership and professional, dedicated staff."
Warren said the credit belongs to the focused and diligent persons in the public sector and particularly the Ministry of Finance, the Office of the Prime Minister, the Attorney-General and the team of regulatory agencies including the Central Bank and the Securities Commission.
"Their commitment to the sound regulation of the financial services industry is to be commended; they should be very pleased with the results of this report."
Not all has changed
Though The Bahamas financial services industry continues to evolve, much of its strength lies in what hasn't changed.
The Bahamas remains a stable, democratic environment, free of income, inheritance, capital gains and corporate taxes. Air and communication links to the US continue to grow and improve. An established financial centre since the 1930s, the country maintains an outstanding infrastructure for commercial and industrial activity. An experienced and diverse workforce of more than 4,000 professionals ensures service of the highest quality.
One of the world's most developed financial centres, The Bahamas provides products and services for banking, private banking and trust services, mutual fund administration, investment advisory services, accounting and legal services, e-commerce, insurance and a corporate and shipping registry.
Add to that a year-round temperate climate, friendly people and a culture that has encouraged visitors since the 1800s and it?s easy to understand why 35 of the top 100 global banks have made a home in The Bahamas.
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