In recent years there has been a significant shift in policy and practice in most offshore financial jurisdictions the world over. This shift has been occasioned by both international imperatives and domestic circumstances. As a consequence there has undoubtedly been more transparency and efficacious regulatory supervision than hitherto. Yet, the offshore financial sector remains vital component in the architecture of international financial services for legitimate investors and clients.
In St Vincent and the Grenadines, we have had to respond to the queries and concerns of the Organisation for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF) but in a manner which ensures our jurisdiction remains a viable and creative one. Accordingly, we in St Vincent and the Grenadines have had to amend our legislative framework appropriately and revamp our regulatory and promotional institutions. In the process, St Vincent and the Grenadines has laid the basis for a major take-off of the international financial services sector, formerly known as the offshore financial sector. Indeed, the core of the sector in our jurisdiction is intact.
Under democratic leadership and sound structure, our jurisdiction is alive and growing. St Vincent and the Grenadines offers to wealth managers, financial intermediaries and service providers a well grounded political stability and good governance, an excellent judicial system, a splendid professional infrastructure which internationalist in outlook, with advanced telecommunications, industry adherence to international best practice, zero taxation of international entities, the lowest government fees of any comparable jurisdiction, a multiplicity of strong support systems, and a magnificent landscape and seascape in the Caribbean. The government of St Vincent and the Grenadines has developed a well regulated and exclusive international financial services sector. In St Vincent and the Grenadines, there has been a history of cooperation and strong support of direct foreign investment and belief in the sanctity of private property.
The success of the Mustique Company is testimony to the security of the investment climate in St Vincent and the Grenadines. The Mustique Company owns and manages the privately owned Grenadine island of Mustique and is an example of the use by the government of taxation incentives to bring sound and reputable development to the country.
Like its commitment to the longevity of the Mustique project, so too is the government committed to building a sound and reputable international financial services sector.
The international financial services sector in St Vincent and the Grenadines comprises:
• International Business Companies (IBCs) including Limited Liability Companies and Segregrated Cell Companies;
• International Banks;
• International Trusts;
• International Insurance Companies; and
• Mutual Funds.
IBCs form the bulk of the sector with mutual funds being an important growth area. Trust companies operate as international financial service providers and are licensed and regulated in St Vincent and the Grenadines. IBCs are given corporate capacity to own a freehold interest in local real estate, provided that if the company would otherwise require an alien landholding licence (ALHL), such a licence must be obtained. The facility of segregated cell companies and the granting of corporate capacity to own local real estate subject only to the requirement for ALHL, offers an attractive option for the registering and recognising of mutual Funds as well as opens up many interesting tax planning opportunities for establishing real estate investment companies on the island.
Key institutions that are pillars in ensuring the sound regulation of the industry are the International Financial Services Authority (IFSA), the Financial Intelligence Unit (FIU) and the National Anti Money laundering Committee. The FIU is a member of the Egmont Group and has been commended by key foreign states and international bodies for its work.
The IFSA is the autonomous regulatory body for the international financial services and is professionally run and staffed. The ongoing focus at the IFSA is to implement the most efficient operating processes and to ensure competitive international products whilst simultaneously protecting the reputation of its international financial services sector. The country also operates a highly efficient shipping registry.
In order to encourage the influx of highly qualified professionals to the country, it is permissible for foreign nationals to become licensed service providers. A skilled Personnel Programme aimed towards attracting additional relevant skilled persons to the jurisdiction is also being finalised.
The industry in St Vincent and the Grenadines is a diverse one, made up of professionals from a plethora of countries and regions around the world including Liechtenstein, Hungary, Latin America, Canada and the USA. These professionals work in tandem with qualified Vincentian industry practitioners to create a dynamic sector with great potential for growth.