Repositioning Financial Services – Attracting Quality Business

 

Ladies and gentlemen, it is a great pleasure to speak to you this morning to examine the manner in which the Ministry of Financial Services & Investment is working to reposition the financial services sector in The Bahamas.  I first wish however, to take this opportunity, ladies and gentlemen, to thank Ms. Bartlette and the CEO Network for providing this opportunity for us meet and exchange views. 

 

The once quiet, unnoticed world of financial services has become the focal point for international attention and increased global competition.  The end result is that people and capital can move freely and instantaneously in an environment of unprecedented choice when it comes to where they want to vacation or do business.  My government is willing to do whatever it takes to ensure that The Bahamas is seen as a viable choice for financial institutions and their clients.

 

In The Bahamas, the Financial Services sector contributes between 15 – 20% of the Gross Domestic product (GDP) and creates a wealth of high income generating jobs. More than 13,000 Bahamians are employed in this sector and it provides a yearly payroll of some $360 million. The sector also yields more than $12million annually in tax revenue.

 

In spite of these statistics the government recognizes that The Bahamas is simply scratching the surface of this vibrant worldwide industry.  The creation of the Ministry of Financial Services & Investment reflects the government’s policy commitment to promoting Financial Services as a key driver and enabler of The Bahamas’ economic prowess.  The Ministry has been given full license to take all necessary measures to build awareness and to heighten the appeal and reputation of our Financial Services sector.

 

We believe that The Bahamas’ enjoys unique advantages.

 

The Bahamas

·        imposes no income, capital gains, inheritance, payroll taxes - some would consider the Bahamas a financial paradise solely on this factor.  It is important to recognize, particularly in light of OECD arguments, that the Bahamas has never imposed a direct taxation system.  Therefore, the rules of the game are the same – international persons who chose to do business or to live in the Bahamas receive the same benefit that Bahamians do.  There is no ringing fencing of taxation regime. 

·        has a strong respect for the privacy of persons.  As you know, the term bank secrecy is used as a common lexicon in OECD communication.  However, I think this could only result in a breakdown in communication.  In 1996, the Bahamas criminalized money laundering – one of the first international financial centers to do so -  this law was firmly supported by the international banks who formerly introduced into their codes of conduct in the 1980’s adherence to international KYC best practices.  Further, our legislative adjustments of 2000, place the Bahamas comfortably among the pace setters in ensuring transparency through comprehensive KYC systems and respecting the privacy of clients as supported by the UN principles.

·        Has a strong Democratic history – more than 270 years of uninterrupted democracy.  Identified as a model of transition to independence.  International status  consistent with Canada and Australia.  Continuation of full adherence to law and peaceful transitions of political power, active participant in Commonwealth.  The Bahamas is stable – a feature that is very attractive in a volatile world   

·        Business facilitation by the government – my Ministry is here to let you know that you are welcome in the Bahamas.  We are hopeful that we will have an opportunity to role out the red carpet for you as you grow your businesses in the Bahamas over the next few years.  One word about the red carpet – we are committed to ensuring that the private sector has the tools to succeed. 

·        Our commitment to excellence in education and professional development, the existence of an independent judiciary, a sound fiscal environment and strong public – private sector relations all build a compelling story of why The Bahamas is a sound investment.

 

Last year my Ministry worked together with the private sector on a Strategic Plan for the Financial Services sector, because we all recognized the need to enhance the economy by repositioning and expanding financial services and to re-claim competitive advantage without compromising integrity of sector.

 

In the Strategic Plan, it was agreed that we would promote The Bahamas as a “Blue Chip, Well Regulated and Cooperative” Financial Centre.  We would not be second best.  We would sit at the table as a responsible participant in the financial services industry, recognizing that The Bahamas has a place alongside London, New York, Switzerland, Singapore etc.

 

The Ministry therefore has concentrated over the past year in shoring up the regulatory foundations of the Financial Services sector to protect and enhance the attractiveness of The Bahamas.  To facilitate this goal and in keeping with our policy to involve the private sector in making the decisions which affect their industry the Financial Services Consultative Forum was established.  The Forum is a “Think Tank” of experts from the private sector and its primary role is to advise the Government and the Ministry of Financial Services and Investments generally on policy matters pertaining to or affecting the economy and specifically the financial services sector. 

 

With the assistance of the Forum, the government has successfully introduced and passed the e-commerce legislation and the Investment Funds Act.  With the Forum’s continued assistance the government intends to shortly introduce:

 

 

In closing I wish to reiterate that the government is committed to providing a well regulated financial centre and that The Bahamas remains open for business.  I look forward to having the opportunity to discuss with you on an individual basis how your business would benefit from a presence in The Bahamas.