Better-regulated offshore sector brings new business to St Vincent
Monday, July 5, 2004
KINGSTOWN, ST Vincent: The International
Financial Services Authority (IFSA).of St Vincent and the Grenadines reports
that in real terms 2004 has seen a growth in the registration of international
business companies (IBCs) of 84 per cent over the previous year.
According to the Searchlight Newspaper, by the end of April some 357 new IBCs
had been registered, compared to 194 in 2003. The rate of renewals of existing
companies is just a fraction higher than it was last year. The renewal rate is
a very important indicator of the degree of sustainable business. The year-to-
date income of the Authority for April 2004 was $1,802,662.30 compared to the
year-to-date figure for April 2003 of $1,345,124.57; an increase of nearly
half a million dollars.
The IFSA says that with a high standard
regulatory regime in place, St. Vincent’s voice is now respected on the world
stage, and at home, real income generated by the sector, as well as real jobs,
is on the rise.
According to the IFSA, the full weight of
the negative listing of SVG had its greatest impact in 2003 with a drop in
revenue of approximately $1 million. It is for this reason that the work of
the National Investment Promotions Inc (NIPI) was so timely in spreading the
news that SVG is off the black list. In just six months after the coming on
stream of NIPI, the word has gotten out and people are once again considering
SVG as a credible jurisdiction in which to invest.
Areas of promise in the sector are in IBCs,
international private banks and insurance and mutual funds. As indicated, the
growth in new IBCs for the year has been very high (84 per cent). The
Authority is confident that the small international private banking sector
here will strengthen. The international banks (formerly called offshore banks)
now employ some 41 Vincentians; this figure excludes professionals engaged to
perform specific services (e.g., accountants and lawyers).
Internationally there is a growing demand
for “designer” or more exclusive private banks. There is disenchantment with
the lack of personalized customer services offered by commercial banks
onshore, where automation has gone too far. International private banks are
offering personalized and more diversified services, including asset
management and the offer of higher rates of return, not readily available in
mainstream high street banks. The new International Banks Act will further
spark the growth of this sector as it contains many investment friendly
provisions. The year 2004 has also seen the
licensing of two new mutual fund entities and five new international insurance
companies. The Authority has seen much interest, both in terms of inquiries
and new applicants in these two sectors. The Authority is processing its first
new banking application in two years. With ongoing training and the
strengthening of its resources, IFSA is well equipped to regulate an expanding
sector.
As a further incentive to growth, the
Authority, in collaboration with the private sector, is conducting a fee
review to ensure that prices are competitive.
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