In The Bahamas, new legislation continues to be introduced to stimulate further growth and development of the country’s well-established financial services sector.
A Purpose Trust Act, a Segregated Accounts Companies Act, enhancements to the International Business Companies Act and amendments to the Perpetuities Act have all been enacted and represent the latest initiatives in what has become a busy period for legislative developments in The Bahamas. In addition, Bahamas foundations will be available in September.
This new legislation combined with recent Investment Funds and E-Commerce Acts embody a legislative direction that is market driven but at the same time recognises international standards.
*"The enactment of these pieces of legislation is the result of close public/private sector collaboration and cooperation,"* says Minister of Financial Services & Investments, the Hon. Allyson Maynard-Gibson. *"In particular, the members of the Financial Services Consultative Forum, the Association of International Banks & Trust Companies and the Bahamas Financial Services Board are to be commended for the many untold hours they dedicated to assist us with legislative developments."*
Purpose Trusts are now a fundamental planning tool for both private and institutional clients. The enactment of this legislation will allow The Bahamas to attract new types of business since it is a specific type of trust established for a non-charitable purpose with no specific ascertainable beneficiaries.
##Segregated Accounts Companies (SAC)##
The legislation represents an important step forward for the industry since the SAC may segregate its assets into separate accounts which are independent and separate from each other and from the "core" account of the entity.
Amendments to the IBC legislation enhance the attractiveness of a Bahamian IBC as a vehicle for many types of financial services businesses. Among the many enhancements are the ability to use an IBC to carry on external insurance and to register mortgages and charges for shares.
Amendments to The Perpetuities Act 1995 enable families to plan for five generations by instituting a period determined by a life or lives in being plus 21 or 150 years.
##LEADER IN WEALTH MANAGEMENT##
The Bahamas enjoys regional leadership in wealth management, in large part due to the focus on providing high quality services to high net worth individuals (HNWI), at a time when the need for effective wealth management has never been greater.
The recent legislative package ensures that The Bahamas remains at the cutting edge of wealth management. *"The Bahamas has significant comparative advantages in the private wealth management sector, and the current transition reflects a fundamental shift in the private banking business as we distance ourselves from low-cost jurisdictions,"* the Minister says. *"We are not seeking to be a bottom feeder in the private banking business; our aim is to be perceived as absolutely mainstream."*
According to the Minister, the desire to be part of this quality club is the reason the jurisdiction is streamlining its banking sector and eliminating those institutions that do not measure up to the necessary standards and who are not prepared to invest to meet them.
As a service-based economy, The Bahamas will succeed in its two primary sectors of tourism and financial services by recognising, embracing and nurturing two simple operating principles in everything it does – providing value for money and providing top quality service. These are inter-dependent, not mutually exclusive principles.
The participation by The Bahamas in financial services is viewed as critical to the nation’s economic future. *"We are building with this future in mind – we are building a sustainable, viable hub of finance,"* says the Minister.
The Ministry of Financial Services and Investments was established two years ago to ensure that the second most important component of the Bahamian economy, after Tourism, has a voice at the Cabinet table.