The Tribune

By ANNELIA NIXON

TRIBUNE Business Reporter

anixon@tribunemedia.net

THE GOVERNMENT plans to eliminate VAT on trust services and property transfers into trusts for the benefit of family members, a Cabinet minister revealed yesterday, in a bid to boost The Bahamas’ competitiveness as a wealth management and estate planning hub.

Jerome Fitzgerald, minister of economic affairs, told the Nassau Conference on financial services that the reforms will be tabled in Parliament before year-end and are expected to take effect through both legislation and policy. The Department of Inland Revenue is presently reviewing guidance notes and draft legislation.

“Firstly, we will remove VAT from trust services at the end of this year,” Mr Fitzgerald said. “Secondly, we will also remove VAT from the transfer of property to trusts for certain classes of beneficiaries, including transfers to family members.”

He said the changes are intended to ensure families are not financially penalised for using trusts as part of their succession planning. “The aim in both cases is the same, which is to provide for people you love, and VAT should not penalise anyone who chooses to plan ahead,” Mr Fitzgerald said.

He added that the Department of Inland Revenue intends to issue and table the necessary amendments for debate in Parliament before the end of 2026.

“For the trust companies, banks and advisers in this room, this speaks directly to structures you recommend to your clients every day,” Mr Fitzgerald said. “It lowers the cost of establishing and maintaining a Bahamian structure, and it takes VAT off the movement of assets from one generation to the next, which makes the case for families managing their wealth and succession planning in our jurisdiction more attractive.”

Mr Fitzgerald also outlined a broader push to position The Bahamas as a leading jurisdiction for international family offices, arguing that global wealth management clients are placing greater value on certainty, speed and predictability.

He cited the BCG Global Wealth Report, which he said estimated cross-border wealth reached approximately $15.6trn last year, while Hong Kong narrowly overtook Switzerland as the world’s largest cross-border wealth hub.

“This major shift demonstrates the fact that leadership positions in the global financial services industry cannot be taken for granted,” Mr Fitzgerald said. “The map is changing as we speak, and that raises an important question for us here in The Bahamas. Where do we intend to sit on that map in the next 10 years and beyond as this realignment takes place?”

Mr Fitzgerald said the financial services sector is facing pressure from the 15 percent global minimum corporate tax, increasing transparency and beneficial ownership requirements, correspondent banking de-risking and competition for skilled professionals.

“Our approach must be to maintain and, when necessary, raise our standards,” Mr Fitzgerald said. “Protect our reputation while removing the points of friction that do not serve our interests.”

He added that the Government’s response will focus on creating greater certainty for international families deciding where to locate their wealth, businesses and investments.

“So predictability is of critical importance,” Mr Fitzgerald said. “A clear residency framework, consistent regulation, political stability and efficient government process all reduce the risk to a family when it commits its capital to a jurisdiction or an investment.”

Mr Fitzgerald highlighted the Government’s plans to establish a family office programme through Bahamas Invest Concierge, under which qualifying families would enter into agreements with the Government covering areas including Immigration, tax, business licensing and other approvals.

The Government is also advancing legislation for a Bahamas tax residency certificate, with Mr Fitzgerald saying the framework is in its final drafting stage. Qualifying individuals and entities would be required to spend 90 non-consecutive days in The Bahamas to obtain the certificate.

Mr Fitzgerald also pointed to recent legislative changes affecting wealth planning, including the Usufruct Interest Act 2026, statutory merger provisions under the International Business Companies (IBCs) Act and the Segregated Accounts Companies Act 2025.

“Fortunately, our own history shows us that The Bahamas performs well when we respond to changes that the market needs and requires,” Mr Fitzgerald said. “Modern instruments we have developed, such as the usufruct, the demerger and the segregated accounts company, reflect our ability to update our wealth planning tool-kit for families’ needs as they evolve.

“So, this is my challenge to you. You need to be solution-oriented for your clients. The best solutions frequently will be a combination of the tools in your toolbox.”

Bruno Roberts, the Association of International Banks and Trust Companies (ASIBT) chairman, acknowledged the pace of regulatory and tax changes confronting the industry, while stressing the importance of closer collaboration between the private sector and policymakers.

“Tax frameworks are being rewritten while we are still implementing the ones from the year before,” Mr Roberts said. “Expectations from regulators, clients and governments converge on us at once, and business as usual has quietly become the riskiest strategy in the room.”

Mr Roberts said industry professionals have become accustomed to conferences where concerns are identified but little changes afterwards.

“Now, I know some of you are rightly sceptical of models like this,” Mr Roberts said. “You have sat through conferences where everyone agreed that things were complicated, and then very little changed.”

He said bringing regulators, Government and industry together could help produce more practical responses to the challenges facing the sector. “So let me be plain about what today can and cannot be,” Mr Roberts said. “AIBT does not have all the answers. Nobody in this room does individually.”

Mr Roberts said the combined expertise of stakeholders could help The Bahamas respond more effectively to changes in the international financial services environment.

“But regulators, government and industry under one roof for the day will get us closer than we would if we were in our separate offices making separate guesses,” Mr Roberts said.