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Wednesday, January 29, 2014

Jamaica Takes First Legislative Step to Offer Offshore Financial Services

On February 8, 2011, Jamaica’s House of Representatives passed the Jamaica International Financial Services Authority bill. If the bill is passed by the Senate and ultimately signed by the Governor General, Jamaica would be firmly positioned as a major international financial services hub.  Equally, passage of the Act is expected to provide many other opportunities for the country.

According to Jamaica Information Service (JIS), Minister of Industry, Investment and Commerce, Hon. Karl Samuda, who helmed the Act, said, “As a centre of excellence, Jamaica’s employment potential will be between ten and 25,000; government revenue can conservatively estimated to range between US$400 million and US$800 million. Service provider revenue will be in the vicinity of $1 billion-$2 billion dollars, and the obvious spin offs that will flow from this investment.”

The passing of the bill is a chief turning point for Jamaica, which did not happen without   skepticism. JIS reported that opposition spokesperson on finance and planning, Dr. Omar Davies, said that countries such as the United States and members of the European Union have become more guarded as to how their companies do business externally. Samuda responded, “If you promote entrepreneurship as a necessary ingredient for growth, implicit in that is the need to take some risk. The rewards are greatest when the risk is greatest.”

In an interview with the minister for tourism, Ed Bartlett, William Cash of Spear’s Wealth Management Survey asked why anyone with a high net worth (HNW) would want to use Jamaica as a place to park their cash and assets when they could choose neighbouring Cayman, which has one of the lowest crime rates in the world and doesn’t have capital-gains tax, inheritance tax or income tax. Bartlett noted that with the media placing so much emphasis on Kingston’s gangland problems they fail to see that the remaining parts of Jamaica have less crime than Antigua or Barbados and that crime against tourists rarely happen. Further, legislation and related regulations currently in passage would allow HNWs who open offshore bank accounts in Jamaica to reap all of the tax benefits offered by Cayman and the British Virgin Islands.

The Jamaica International Financial Services Authority Act is set to go to the Senate for approval. If endorsement and implementation occurs, the need for interested and participating individuals to obtain legal advice will become even more critical.

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