Saint Vincent and the Grenadines: Offshore Legal and Tax Regimes
Swiss lawyers introduced Saint Vincent and the Grenadines to the international financial services sector in 1976. Three years later the country gained independence from Britain and embarked on the process of nation-building – setting up the foundations of an independent nation state. When the country was more mature it was able to take a second look at the international finance industry in 1996 and take the policy decision to move this sector into the forefront of the national economy. The international finance legislation was overhauled and a package of financial laws was introduced. Regulated and licensed agents and trustees, known in Saint Vincent and the Grenadines as Registered Agents, provide international financial services.
The Offshore Finance Authority was created by Parliament to institute a new system to manage, directly control and supervise the offshore financial services industry in the country. Its role was clearly defined by its governing statute – The Saint Vincent and the Grenadines Offshore Finance Authority Act, 1996. The business of The Authority is under the direction of a five-member board of directors.
In November, 2003, the Offshore Finance Authority was re-named as the International Financial Services Authority (IFSA).
IFSA has the following specific responsibilities:
- To administer and oversee the process of licensing Registered Agents, Private Trustees, Financial Fiduciaries, and Registered Trustees and regulate the activities of Registered Agents and their services to ensure compliance;
- To administer and oversee the licensing, regulation and supervision of International Banks;
- To appoint, and to supervise the activities of, the Offshore Finance Inspector; and
- To oversee the activities of the Registrar of IBCs and the Registrar of International Trusts.
In 2011, the IFSA was expected to fall under the umbrella of the Financial Services Authority, a single regulatory organisation, in an effort to enhance and strengthen the regulatory and supervisory capacity of the jurisdiction. However, the Financial Services Authority Act 2011 has yet to come into force.
Saint Vincent and the Grenadines now has a small, carefully vetted and properly regulated international private banking sector. As of June 30, 2011, four banks were licensed to conduct international operations from Saint Vincent and the Grenadines. The regulatory body, the IFSA, has concentrated its efforts on ensuring that only banks with a real presence, and sound business operations and policies, operate in Saint Vincent and the Grenadines. There are no shell banks licensed in Saint Vincent and the Grenadines. All banks have been and will be subject to further on-site examinations by the authorities every 12-18 months.
In 2008, amendments to The Banking Act repatriated control over international banks to the International Financial Services Authority (IFSA).