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Following this year’s Caribbean Investment Forum meeting in Port of Spain (Trinidad & Tobago) on the 11th and 12th June, several countries have announced that they too want to turn themselves into tax havens.

So why the sudden rush? Well the countries involved: Trinidad & Tobago, Jamaica and the Dominican Republic don’t exactly have what could be called vibrant economies. In fact they are not far off being basket cases. So when the Forum reported the huge financial success of other Caribbean tax haven states like the Bahamas, the Cayman Islands and the British Virgin Islands, these poor countries saw the answer to their problems – become tax havens themselves.

Trinidad & Tobago

The success of their neighbours has prompted the Trinidad & Tobago Islands to plan to open an International Financial Centre (also known as an International Business Centre (IBC) or an Offshore Tax Haven in September, specifically targeting Panama as their main competition for business.

Trinidad’s Minister of Finance, Karen Nunez-Tesheira, was in New York a couple of weeks ago to meet with investment banks and credit agencies trying to accomplish this and accountancy giant PriceWaterhouseCoopers are advising the government how to change their tax structure in order to compete with the popularity of Panama’s bustling Offshore International Financial Centre.

Jamaica

Just last week it was reported that Jamaica also wants to get into the International Financial Centre business but as yet specific plans have not been announced.

The Dominican Republic

Plans here seem a bit more advance and local press reports are stating that the intention of the Dominican Republic to move into the offshore financial business was proceeding.

Will they succeed?

Well it’s one thing to announce your intention but quite another to carry out your plans to a successful conclusion. The problem for these aspiring financial centres is the very weakness of their economies and, particularly in the case of the Dominican Republic, the weak banking regulation, default on loans, and  unsophisticated local financial market.

Be that as it may, some people are taking the announcements seriously and it is noteworthy that Economist Conferences, in association with the Commercial Banking Association of the Dominican Republic plans to have a Regional Financial Forum on the topic: “Harmonizing financial regulations in Central America and the Dominican Republic” on July 31st and August 1st this year.

Watch this space – but in the meantime until we see how things progress I see no reason to desert the traditional offshore tax havens like the Bahamas, the British Virgin Islands, the Turks & Caicos Islands, the Caymans, Panama, Belize, Costa Rica, St Vincent & the Grenadines, Antigua, Anguilla, Barbados, Bermuda, Grenada, Netherlands Antilles, Nevis, St Kitts, or St Lucia. They all have advantages and disadvantages and some are better suited to certain types of business than others. If you’d like to find out more about a particular tax haven just drop me an email: james@jamesgreenandco.co.uk

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