The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known Miami law firm is aiming to open a niche Bahamian tax advisory and structuring affiliate “within 12 months”, targeting a local market it believes will eventually “grow into something far larger”.

Steven Cantor, attorney and partner at the Cantor & Webb law firm, who has been advising Bahamian financial services institutions and their clients for decades, yesterday said the formation of CW Tax Services Corp Ltd was designed to “institutionalise” services he and his colleagues already provide.

The Bahamian affiliate, which is being established as a Financial and Corporate Services Provider, will especially target American residents of the Bahamas and those persons with dual US citizenship.

With the US Foreign Account Tax Compliance Act looming on the horizon, and the Internal Revenue Service (IRS) unveiling new initiatives to entice American citizens to reveal hidden offshore assets, Mr Cantor and his firm are “confident the opportunity is there” to establish a physical presence service provider in the Bahamas.

“We think we’re just taking baby steps into something we think can grow into something far larger,” Mr Cantor told Tribune Business. “I honestly don’t know the numbers, but inherently there are sufficient numbers to merit our serious consideration.

“If you look at Lyford Cay, Albany and other islands where there is substantial wealth, many of those families have either US property or US family members.

“We’re much more interested in depth rather than breadth. We’re looking at the market that presents sophisticated issues and sufficient tax exposure to merit our attention.

“We’re not the law firm for everyone in the world, and are not the tax advisory for everyone in the world.”

The IRS’s various ‘offshore’ disclosure programmes have convinced 45,000 US taxpayers to reveal previously-hidden overseas assets in the past five years, generating over $6 billion in interest, taxes and penalties.

“We know there’s a lot more out there,” Mr Cantor added. “We know the Caribbean is ripe with dual citizens.”

Fellow Cantor & Webb attorney, Arthur Dichter, said the Bahamas was no different “demographically” from other countries where US dual citizens live, meaning there was a potentially large market for its tax advisory, planning and consulting services.

“We have provided these services on a one-to-one basis for many years,” Mr Cantor told Tribune Business. “We’re trying to institutionalise those services. It’s not like we’re starting off in a market unknown to us. It’s not like we’re doing something we’ve not done before.

“We’re just trying to institutionalise it, and make sure our commitment complies with all regulations and work permit issues.”

Through a ‘physical presence’ via CW Tax Services, the Miami-based law firm will be able to offer new and potential clients faster, better service, and attract increased business.

Mr Cantor said CW Tax Services was the product of extensive consultation with Bahamas Financial Services Board (BFSB) member institutions and executives, who all “pretty much validated our view that there is a need for qualified US tax advisory and preparatory services here”.

Ex-BFSB chief executive Wendy Warren, and her Caystone Solutions firm, are acting as CW Tax Services’ registered agent, as it gathers all necessary approvals and “builds up momentum” to a full opening.

Mr Cantor, while confirming that CW Tax Services would open “within 12 months”, said staffing levels and other business indicators would be dictated by market demand.

Until business levels built to a critical mass, he suggested that Cantor & Webb might start with “designated days” where persons flew in from Miami to meet Bahamas-based clients, rather than immediately start with local staff.

Mr Cantor described CW Tax Services and a Bahamian ‘physical presence’ as “a logical continuation of our services”, given the proximity of this nation to Miami and his firm’s history and connections to the financial services sector.

“It’s a natural place for us to go, given our long-standing relationship with the financial services companies,” Mr Dichter said, adding: “It’s not that we’re greenfield here.”

He emphasised that Cantor & Webb, and its Bahamian affiliate, had a long-term commitment to this market and its clients here, and said: “We definitely don’t want to be viewed as carpetbaggers.”

Apart from international clients, Mr Cantor said CW Tax Services would also advise Bahamas-based trust companies and other financial institutions when it came to US-related tax structures and planning.

“FATCA has two aspects to it,” he explained. “One aspect is the institution side, where you have to have computer and software systems to do the reporting.

“The other side is dealing with the private clients, and that is the side where institutions call us in to assist clients.”