The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s has been praised for bundling Immigration with financial services in the same ministerial portfolio, a senior executive suggesting it would help “leverage real international business” for the Bahamas.

Tanya McCartney, the Bahamas Financial Services Board’s (BFSB) chief executive, told Tribune Business that the ability to use Immigration as an economic and business development tool had been enhanced by placing it under Brent Symonette.

With financial services also under Mr Symonette’s ministerial responsibility, Ms McCartney indicated the industry is hopeful that residency-related permits can be used to attract both high net worth clients and international businesses to domicile in the Bahamas.

She suggested that the structure of government, as it relates to financial services and Immigration, was especially timely given the Bahamas’ need to “look beyond” the immediate ‘blacklist’ threat towards the industry’s long-term repositioning.

While the Bahamas’ approach to automatic tax information exchange, and avoiding a possible European Union (EU) ‘blacklisting’, was the immediate priority, Ms McCartney warned that this nation could not afford to ignore reforming its financial services business model.

Speaking after she and other industry executives met Mr Symonette on Friday, Ms McCartney said: “What we’re pleased about, particularly in financial services, is that the portfolio of financial services is matched with Immigration.

“We believe Immigration is a lever that can be used to develop real international business in the Bahamas and strengthen financial services as a whole.

“We feel that with those two portfolios together, we can leverage both to underpin financial services and support financial services. We have the right forum where both matters can be looked at side by side under one minister.”

Ms McCartney said Immigration, and associated permanent residency and other options, were especially important “when you look at opportunities to attract individuals to come here to create businesses in financial services”.

The Bahamian financial services industry has long viewed Immigration, and associated residency options, as something that could spur faster growth and the development of a new business model.

Many sector executives believe the future lies in attracting high net worth clients to follow their assets here by choosing the Bahamas as their primary domicile.

Besides potentially insulating them and their wealth from home country tax authorities, such individuals may also eventually follow the lead established by Sarkis Izmirlian and Joe Lewis and invest in the domestic Bahamian economy, creating hundreds of local jobs.

The presence of more high net worth clients in the Bahamas would also attract more providers to service their financial needs, creating the middle class and higher-paying jobs that this nation desperately needs.

And, in turn, an increase in financial services providers would create more businesses with a physical presence in the Bahamas, and doing real business - such as the family offices that provide services to high net worth clients.

Many in the financial services industry, though, believe that such goals have been impeded by concerns over the Immigration process, and whether it is sufficiently transparent, efficient and free from political interference.

Bahamian attorneys have frequently complained that they are unable to advise foreign high net worth clients on the timeline for obtaining residency and investment approvals, with the resulting uncertainty ‘bad for business’.

Immigration has also sometimes suffered an ‘identity crisis’ from its dual role as a law enforcement/national security agency on one hand, and as a business/residency facilitator on the other.

It has often been bounced around to different ministerial portfolios under different governments, the former Christie administration placing it under Fred Mitchell, minister of foreign affairs.

Ms McCartney, meanwhile, told Tribune Business that the Bahamas’ meeting its obligations under the Common Reporting Standard (CRS), the global standard for automatic tax information exchange, was “top” of the issues discussed on Friday with Mr Symonette.

She added that there would have been “no surprises” for the new government, as the BFSB and other industry organisations had fully briefed it on the CRS and other financial services issues when in Opposition.

“All in government were aware of what we needed to do to remain in good standing,” Ms McCartney said. “It’s just a question of maintaining the momentum we have built.

“At the moment the priority is responding to the global initiatives that face us. The key priority is to make sure we implement the CRS, and we every confidence the Government will take the steps necessary to ensure we meet our commitments.’

The Bahamas is currently isolated as the only nation seeking to implement CRS on a bilateral basis, a position that has drawn a warning from the Organisation for Economic Co-Operation and Development (OECD) that this nation could again be ‘blacklisted’ unless it changes course.

The EU is already planning to publish such a list of countries it deems ‘non-cooperative’ on tax matters by end-2017, but Ms McCartney said the Bahamas needed to raise its head beyond the immediate threat.

“We have to get beyond this,” she told Tribune Business. “An adverse listing is one thing, and that not ought to be the sole thing driving us.

“What we need to be concerned with is that this is a whole new world when it comes to co-operation, which impacts the Bahamian business model for financial services.

“We need to get beyond implementation, do what it takes and get on with reforming our business model for long-term growth and stability, and ensure there is a financial services industry for future generations,” Ms McCartney continued.

“We need to get on with being definitive as to what our value proposition, and get beyond any questions as to why they should choose the Bahamas for financials services.”