Financial Services in The Bahamas
Brenda-Lee Russell is the Managing Director of Omni Corporate Services Ltd. and is responsible for the overall day-to-day operations and management of the business, with complete oversight of the business platform and business models. Here she speaks to Finance Monthly about trends within the financial sector in The Bahamas and tells us about her company. […]
Brenda-Lee Russell is the Managing Director of Omni Corporate Services Ltd. and is responsible for the overall day-to-day operations and management of the business, with complete oversight of the business platform and business models. Here she speaks to Finance Monthly about trends within the financial sector in The Bahamas and tells us about her company.
What is the current state of the financial sector in The Bahamas?
I think that the current state of the financial sector in the Bahamas is steady, but optimistic. Within the last few years, we have been faced with many challenges that would have brought us to a place where we had to do things differently. We found ourselves at a crossroad for a mandatory need to change some areas. One significant factor that compelled us to change the way we do business with our clients was the legislation and enactment of The Foreign Account Tax Compliance Act (FATCA). It was enacted in 2010 by the US Congress to target non-compliance by US taxpayers using foreign accounts. FATCA requires offshore Foreign Financial Institutions (FFIs) to report to the IRS information about financial accounts held by US clients (taxpayers), or by Foreign Entities in which US taxpayers hold a substantial ownership interest. The Bahamas did not hesitate to comply with such requirement and in November 2014, we entered into a Model 1 Intergovernmental Agreement (IGA) (Bahamas-US FATCA Agreement) for implementing FATCA. Subsequently, in 2015, The Bahamas and The United States of America Foreign Account Tax Compliance Agreement was enacted. Of course, the ultimate goal of FATCA is to deter tax evasion by imposing information reporting requirements on financial institutions throughout the world (with respect to US persons with accounts in those institutions). Many of the banks and other financial intuitions that work with people with some kind of US Indicia, would immediately have reporting obligations – firstly to the local Competent Authority, for the purpose and intent of being compliant with FATCA. As a result of FATCA, some FIs have opted not to continue to market within the US Jurisdiction and would prefer to stay far away from US clients. This is easily understandable.
Another challenge or change we face, as we speak, is the Common Reporting Standards, commonly called CRS. Once again, the Government of The Bahamas stands ready to comply. It has taken a policy decision to implement CRS by way of the Multilateral Convention. Financial Institutions must be ready to report to the Local Competent Authority, as early as mid-next year 2018.
Although we are faced with many challenges, we are very optimistic that the days, weeks, months and years ahead, shall produce growth and positive outcomes. However, we must be mindful to be on the cutting edge of change in every possible way and we have come to the stage where we must start thinking outside the box. It is safe to conclude that we would have seen a slight degree of shrinkage in our industry, with many of our Super High-Net-Worth clients exiting The Bahamas and a number of our banks restructuring internally. We’ve also witnessed a couple of our major banks decommission private banking, while focusing solely on the trust side of the business, or vice versa. It is understandable that these radical changes have resulted in a few job losses, but it’s safe to say that The Bahamas’ financial sector continues to thrive.
What do you anticipate for the sector in the future?
I anticipate to see overall growth in the financial sector, as well as the evolvement of many small financial institutions.
What is Omni’s mission? What differentiates the company from its competitors?
Omni has learnt how to manage risk to optimize solutions for our clients. We have trained our minds to think differently. We take the time to evaluate, calculate and assess our clients’ overall objectives and come up with a sound solution. While we will always comply with our local regulators and act within the ambit of the law, we will not be afraid to think outside the box to create a solution for our ever-changing clients. Omni’s mission statement is: “Infinite Possibilities, Answers and Solutions in a Changing World”. One of our distinct differences, when compared to our competitors, is that we will not send away our US clients. Instead, we help them fully understand our obligations under FATCA and that we must report to the IRS who they are, as well as their interest in the assets that we manage.
Things have changed in the past 15-20 years, but at Omni, we are open-minded enough to have adapted to these changes.