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| Caribbean Property Magazine Home / February 2008 / 'Developing A World-Class Offshore Services Sector' | SEND THIS PAGE TO A FRIEND  |
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FEBRUARY  2 0 0 8Issue 13
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| DEVELOPING A WORLD-CLASS OFFSHORE SERVICES SECTOR By Lanston Connor Anguilla, a tiny British Overseas Territory situated just 120 miles east of San Juan Puerto Rico, is well renowned for its beautiful, pristine beaches, excellent cuisine and friendly inhabitants, and for its offshore services sector, having carved a niche for itself in the international financial services arena. Two questions immediately come to mind ………what are the financial services offered and what sets Anguilla apart from the rest? ANGUILLA IS THE PROUD HOST TO ONE OF THE MOST TECHNOLOGICALLY ADVANCED ON-LINE COMPANY REGISRATION SYSTEM IN THE WORLD. The answer to the first question is fairly straightforward - Anguilla offers a range of first-class online and resident financial services, including domestic and offshore banking facilities, as well as domestic and offshore corporate vehicle registration. In fact, Anguilla is the proud host to one of the most technologically advanced on-line company registration system in the world. That system, ACORN, is an acronym for Anguilla Online Registration Network, a system that was launched in 1998. To maintain its status as a premier online system, aiming to be second to none in the world of offshore finanes, ACORN is constantly being upgraded to satisfy the requirements of its users. The Government of Anguilla, cognizant of the components of a successful financial services center, strives to provide the most up to date system in the world through legislation designed to afford flexibility to practitioners while containing many innovative provisions as well. Basically, Anguilla offers three types of tax-free companies: 1. The International Business company – these companies are used mainly for asset protection and tax planning purposes. There is no requirement to file audited accounts or any type of taxes levied. Public disclosure of directors and Shareholders is not mandatory, however this information would have to be held at the company’s local registered office. 2. The Companies Act Company – this company, sometimes called the Anguilla Business Company, can be used as a domestic entity and/or for international purposes. Public disclosure or registration of directors and shareholder details is a requirement, however, no withholding or corporate taxes are required. 3. Limited Liability Company – this company carries limited disclosure requirements and its existence can be perpetual or a specific date of dissolution can be stated at the time of formation. There are no account-filing requirements or taxes levied against these entities. Other recently introduced legislation includes the addition of Mutual Funds, Protected Cell Companies and Captive insurance. | ||||
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| And, to facilitate the ease of registration, ACORN, since its launching, has installed a compliment of over 88 Overseas agents situated in almost every jurisdiction. To register a company in Anguilla, one merely has to contact an agent in one’s jurisdiction who will undertake the registration on the client's behalf. It is easy to verify if there is an ACORN overseas agent is a jurisdiction by checking out the website and searching under the menu item “Financial Services Directory”, then referring to the sub menu “Overseas Agents”. If there is no Overseas Agent as yet assigned to a country, one of the other nearby licensed practitioners, after satisfying due diligence requirements, can form a company for the applicant within five (5) minutes. ANGUILLA IS POISED TO BE THE JURISDICTION OF CHOICE FOR COMPANY REGISTRATION....AND IS DEFINITELY THINKING OUTSIDE THE BOX. With the latest in telecommunication technology and highly qualified service providers, Anguilla is poised to be the jurisdiction of choice for company registration. Anguilla is definitely thinking outside the box. In a recent interview, Lanston Connor, Head of Anguilla’s Financial Services provided further insight in to the world of ACORN, and Anguilla’s financial services sector. CaribPro: How can you best describe your position as head of Anguilla’s Financial Services? L.C.: Anguilla is unique with regards to other oversea territories in that the Registry here falls under the Ministry of Finance and outside of the Financial Services Commission. We are regulated by the FSC in terms of the people who are allowed to utilize the company’s registry. The head of the department is still the Minister of Finance, so I liaise with him in terms of budgeting, administration, plans for travel, marketing etc. CaribPro: Can you give us an overview of the background and genisis of ACORN? L.C.: The ACORN system was launched in 1998 coming out of discussions formed in 1994. It was seen as a way of diversifying the economy from the high-end tourism product that we are known for. The system went live in November 1998 and has been growing since. The original idea came about in conjunction between the Anguillan Government and the British Government. The British Government gave the local government aid to develop a competitive edge in order to allow Anguilla to enter and immediately compete in the competitive market of financial services - just as the other British Overseas Territories, such as Bermuda and the Caymans, had done so successful in the region. CaribPro: What is ACORN’s rate of success and what do you attribute it to? L.C.: We started with about 1,500 companies and today we have over 12,000. We had a growth of 3,200 new companies registered last year alone, compared to 2,000 the year before that, and expect to do around 4,000 registrations this year. The reason of this growth, as I see it, is better recognition for Anguilla. You will see in the Financial Services world, jurisdictions like Bermuda, Caymans, British Virgin Islands, are considered well-regulated top-end jurisdictions in financial services. What people do not realize is that Anguilla is a British Overseas Territory just like these others. There are a total of six of us in the Caribbean, and the same quality of regulation that exists there (for those islands) exists here, too. The main reason for this misinformation about Anguilla is the distance between the islands, and overall geography. I find when I travel the world, that a lot of people have never heard of Anguilla - they may know the names of certain islands in the region but there is a lot of ignorance with regards to their location, the precise islands that make up the Caribbean, how they are operated and how life is on the island. It is an ignorance that is slowly being eroded through advertising, by going out there and meeting people and explaining the situation, referring them to our websites and so on. | ||||
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| CaribPro: What makes Anguilla such an attractive jurisdiction, and what are the strengths of Anguilla’s Financial Services? L.C.: The fact that we are small makes us flexible. The fact that we are new in the sector also brings benefits as to our market size for we have a lot of greater name availability due to the free space in our registry. The fact that we incorporate companies in English, French, Spanish, Russian, German and Chinese and any language that uses the Latin alphabet. Efficiency is one of our main advantages I think, for you can register your company 24 hours a day with Acorn certificates emailed back to you within three minutes, and have your articles and certificates emailed back to you five minutes later. Efficiency is the name of our game. What we wish to see is the banking sector being able to easily accept our electronic documents, so in essence you would be able to incorporate a company into Anguilla from anywhere in the world and have a bank account within half an hour- both a company and a bank account. CaribPro: Do you foresee the tax paradise umbrella remaining in place for the next 5 years, 10 years, 15 years? L.C.: I foresee it to remain as such indefinitely. CaribPro: What will ensure that Anguilla’s Financial Services remain a competitive jurisdiction? L.C.: We need to keep legislation up to date. You will find that Bermuda and the Caymans are developing new products to diversify themselves from IBC’s and are also getting into mutual funds, captive insurance and foundations. These are areas we are looking at ourselves- we currently have a draft on our first Foundations Act being studied for final review. We have just implemented a mutual funds act and doing very well in captive insurance. So while we have stayed in second place, we are trying not just to catch up in the IBC arena, but also to compete in the other areas of financial services. CaribPro: Where is your main point of focus, what sectors are you looking to attract? L.C.: Most of our focus is on attracting trust funds, captive insurance, corporate entities, IBC’s and LLC’s. We also look to target wholly owned subsidiaries of internationally recognized banks, to act as offshore banks here. We currently have three of these. CaribPro: What advice would you give future clients considering offershore services? L.C: I would like to assure everybody that Anguilla is a very high quality jurisdiction with regards to tourism and financial services. I would ask them to just do comparisons with other competitors, background checks with regards to what features they are looking for in a financial jurisdiction, and essentially put us in a comparison chart against our competitors. All I would ask is that they do this, simply give us a chance by looking us up. And, I think we will be able to succeed, for we have been doing very well in the past couple years and I expect to grow exponentially over the next few years. CaribPro: What are your primary marketing steps? L.C.: We focus on attending the various conferences around the world as well as our road-shows. We attend most of the major world conferences such as The Step Conference, the Caribbean Commercial Law, the ITPA, and the Asia Offshore Association Conference which will be held in Vietnam this year. We also do a bi-annual road-show across Asia, in March and October. We make presentations in Shangai, Taiwan, Hong Kong, Beijing, Singapore, and there we network with all the financial agents we can because these are our potential clients. We then set up meetings with our clients, to persuade them of Anguilla’s benefits and the profit margin they would receive here. CaribPro: A word about the future? L.C.: Today we are getting a lot of British Virgin Island business because of changes they’ve made in their legal acts, requirements as well as prices. So we have positioned ourselves first to attract new business, and second to attract existing businesses that are looking for a new home. Personally, I would like to grow beyond 30,000 companies within 5 years. This should generate around 10 to 15 million US Dollars, which would account for about 30% of GDP. CaribPro: Thanks so much for sharing your insights on this vibrant business sector with us, Lanston. Author: T. Lanston Connor, is the Registrar of Commercial Activities for the Government of Anguilla, Department of Financial Services. Mr. Connor is the first Anguillian national to hold this prestigeous and substantive post which includes duties as chief marketer of ACORN, the unique online registration system. He holds a Bachelor of Arts degree in Business Administration from the University of the Virgin Islands, St. Thomas campus where he graduated with honours (Cum Laude) in 1994. He is also a member of STEP and ITPA.
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