Minister of Financial Services, Trade, Industry and Immigration Elsworth Johnson made the case for the continued need for and relevance of The Bahamas financial services sector in a piece he authored as a contributor to the website worldfinance.com, explaining that this country is still an ideal location for the wealth management activity of high-net-worth individuals.
Johnson said in the article that International Financial Centers (IFCs) like The Bahamas continue to be important in the global economy.
“The country is tax-neutral, which means it can avoid the distortions and the corresponding losses that occur when price changes cause fluctuations in supply and demand,” he said.
“Tax neutrality can also ensure that the tax system can raise revenue and minimize the consequences of economic choices. This aids the notion that the same principles of taxation should apply to all forms of business, which further reduces the likelihood of biases influencing economic decisions.”
The Bahamas recently passed a compendium of legislation to align itself with the tax rules imposed by global financial sector watchdogs like the European Union and the Organization for Economic Cooperation and Development.
It has been feared that some of those changes imposed on the financial services sector could herald the death knell for important business done by IFCs.
But Johnson contends that the market remains a competitive one, and The Bahamas remains a competitor.
“It is also demonstrated by the balance that regulators strike between ensuring the financial services industry keeps its integrity while still encouraging lively competition,” he said.
“What’s more, The Bahamas has a government ministry dedicated solely to financial services, while a shared commitment exists between the public and private sectors to help promote and develop the industry.”
According to Johnson, wealth management is still a large part of The Bahamas’ financial sector’s market, where “multinational and multigenerational families can preserve their wealth for the long-term and transfer it to younger generations with relative ease when they place assets in a territory with trust laws”.