Saint Kitts: Offshore Business Sectors
Domestic banking is regulated by the Banking Act 1991 and non-domestic banking falls under the Financial Servicers (Regulations) Order 1997. Nevis has its own Offshore Banking Ordinance 1996.
Two types of banking licenses are granted under the Federation's 1997 Financial Services (Regulations) Order. 'Unrestricted' licenses require minimum financial resources of ECD1,350,000 (USD500,000), while for 'restricted' licenses the level is only ECD135,000 (USD50,000).
The Confidential Relationship Act, 1985 for Saint Kitts-Nevis offers complete confidentiality should foreign authorities seek private banking and financial records. Prison terms are mandatory for violation of the statute.
The banking system consists of the Government owned Saint Kitts-Nevis National Bank, the Development Bank of Saint Kitts and Nevis, the privately-owned Bank of Nevis and the Bank of Nevis International, First Caribbean International, Royal Bank of Canada, Bank of Nova Scotia, RBTT Bank, the Nevis Co-operative Credit Union, the Saint Kitts Co-operative Credit Union and the Foundation for National Development.
At the end of June 2011, the National Bank, which is the largest commercial bank in the Eastern Caribbean Currency Union had assets in excess of two billion dollars.
The Nevis Offshore Banking Ordinance 1996 defines offshore banking as follows:
- Receiving of foreign funds through the acceptance of foreign money, deposits payable upon receipt demand or after a fixed period or after notice;
- The sale or placement of foreign bonds certifcates, notes or other debt obligations or other securities, or
- Any other similar activities involving foreign money or foreign securities, and
- Either in whole or in part using foreign funds so acquired for loans, advances and investments whether in Nevis or elsewhere.
Licences under the Banking Ordinance are issued to eligible companies or qualified foreign banks. An eligible company must be a wholly owned subsidiary of a local bank regulated by the Eastern Caribbean Central Bank that is licensed under the Banking Act to do business in Nevis. A qualified foreign bank is a foreign bank that is licensed under the Banking Act, or is foreign bank with minimum capitalization and assets, as prescribed by the Minister, that is not licensed under the Banking Act but is licensed to do domestic banking in its jurisdiction of incorporation.
An eligible company must be incorporated under the Companies Act as a company limited by shares, and must have objects or business activity restricted to offshore banking from within Nevis. It must have at least one director who is a citizen of Saint Kitts and Nevis with a residence in Nevis. The minimum Authorised Capital must be at least ECD2 Million, of which not less than ECD1 Million has been Subscribed and Paid Up in cash, such cash being deposited in an account maintained by the Permanent Secretary at the Eastern Caribbean Central Bank.
Not later than four months after the close of its financial year, a licensee must forward to the Permanent Secretary copies of its balance sheet and profit and loss account and the full and correct names of the directors of the licensee. The balance sheet and the profit and loss account must bear on its face the certificate of an auditor.