St. Vincent & the Grenadines is doing an extensive revision and updating of its IBC
legislation which is expected to be completed during the first quarter of this year. This is
expected to increase the business coming to the jurisdiction. The year 2005 saw a 13%
increase in income over the previous year, with most of that increase coming from IBCs
and Mutual Funds.
The country now has legislation in place to admit new agents from outside of the
jurisdiction. One new agent from the USA has already been licensed and an application
from a Malaysian company is pending.
The regulatory authority was separated in the recent past from the marketing authority.
The regulatory authority is the International Financial Services Authority (IFSA) and the
marketing authority is the National Investment Promotions Inc. (NIPI).
National Commercial Bank, according to the Executive Director of IFSA is reorganizing
to give major support to the banking needs of the international financial services industry
in St. Vincent & the Grenadines. It will have a department devoted exclusively to this
sector and expects to have online capability by July of this year. Efforts are being made
to involve another local bank in providing services for the industry.
St. Vincent & the Grenadines has some of the lowest fees in the offshore industry. The
annual fee charged by the government is a mere US$100.00. By contrast it is $350.00
per annum in the BVI and US$300.00 per annum in St. Lucia.
Because St. Vincent is an independent nation and not a UK dependent territory, it is not
affected by the EU Savings tax and the potential UK exchange of Information
requirement.
Double Tax Treaties
St. Vincent and the Grenadines (SVG) has no Double Taxation Treaties with other
countries and so is not obliged to exchange tax information with any other government.
The SVG tax authorities do not habitually cooperate with the tax authorities of other
countries.
SVG maintained a strict confidentiality regime up to 2002 under the Confidential
Relationship Preservation (International Finance) Act, 1996, but this was repealed and
replaced by the Exchange of Information Act, 2002. This new piece of legislation allows
exchange or disclosure of information between local regulators and foreign (statutory)
regulatory authorities, but contains a provision for professional privilege.
According to WIPO: “The agreement establishes the terms of a project that is designed to
support a more effective integration of the region into the global economy by fostering
technological innovation, creativity and competitiveness through intensive and effective
mobilization and use of intellectual property.”
A Financial Intelligence Unit was created in accordance with the Financial Intelligence
Unit Act, 2001. The FIU was accepted into membership of the Egmont Group of
Financial Intelligence Units in July, 2003. More than 80 countries are members of the
group which acts as a global focus for the work and development of Financial
Intelligence Units. Their major emphasis is anti-money laundering.
The BVI recently changed its IBC legislation leading many of its registered agents to
advise their clients with Bearer Shares to transfer their IBCs to another jurisdiction. St.
Vincent still offers Bearer Shares, with the caveat that the original Bearer Share must be
held in safe keeping by the registered agent. A copy may be sent to the principal. Where
the principal must have the original share certificate, registered shares are to be preferred.
Panama raised its government fees for IBCs and foundations from the first of the year to
US$300.00. A charitable trust can be established in St. Vincent & the Grenadines to
serve the same purpose(s) as a Panama foundation.
Tax-News.com, London reported on 23rd January, 2006 that a regional banking expert
has proposed the establishment of a regulatory banking body for the Caribbean to oversee
standards in an industry that is expected to grow substantially with the coming of the
Caribbean Single Market and Economy (CSME).
Caribbean Properties. Carla Johnson in Investors Offshore.com (24/02/2006) has
mentioned that as the real estate market is cooling off Re/max International is suggesting
that the time is now right for Americans to buy into Caribbean real estate, as the market is
already strong and likely to strengthen. Ricardo Cardenas, vice president and regional
director of RE/MAX of the Caribbean and Central America has confirmed that St.
Vincent & the Grenadines is being actively recommended as one of the places to
purchase real estate (The Vincentian, March 3, 2006).
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US/Columbia Free Trade Agreement. Mike Godfrey reports in Tax-News.com that
United States Trade Representative Rob Portman has announced that the U.S. and
Columbia have signed a comprehensive trade agreement that will eliminate tariffs and
other barriers to goods and services and is expected to increase trade between the two
countries.
This follows a similar agreement between the US on the one hand and the countries of
Central America and the Dominican Republic, on the other.
Iran’s Weapon of Mass Destruction
Iran’s president, Mahmoud Ahmadinejad has announced that on March 20, Iran will
launch its own commodity market (similar to those in New York and London) for trading
oil and gas, but it will trade only in Euros. Oil is currently traded in dollars. When a
major portion of oil and gas trading shifts to Euros, there will be reduced demand for US
dollars and foreigners will be less likely to buy US dollar denominated debt. The US
government will no longer be able to borrow $2.2 billion per day to keep afloat.
The US will have to earn Euros to buy foreign oil and gas. It will no longer be able to
print dollar bills to do so. Iran has 25% of the world’s natural gas reserves and produces
4.1 million barrels of oil per day (much more than Iraq’s capacity of 2.9 million barrels a
day).
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The US cannot attack or embargo Iran because its allies depend on Iran for 2.6 million
barrels of oil a day. According to the Financial Times (January 31, 2006), “Iran is
OPEC’s 2nd largest oil producer. A halt in its oil production would send international oil
prices to more than $100 a barrel, analysts predict.”
China, which will overtake the UK and French economies by year-end to become the 4th
largest in the world, gets more than 13% of its oil from Iran. India gets 6.8% of its
energy needs from that county, including a $40 billion natural gas deal. Russia has a
massive investment in energy there. Japan, South Korea, all allies of the US, cannot do
without Iranian oil. This is why it is unlikely that the US will attack Iran. The question
is will Israel?