St. Lucia, the perfect profile for financial services
By: Anthony Bristol

After years of deliberation, planning, and the launch of St Lucia into the financial services industry in March 2000, the island is now establishing itself in the market as a unique and reliable model jurisdiction for financial services. The key ingredients in this winning formula are a suite of legislation that meet both confidentiality and regulatory expectations, committed regulated professional service, a state of the art public online registry system and a private sector promoter.

The laws passed in December 1999 include; The International Business Companies Act (IBC); The International Trust Act; The International Mutual Funds Act; The International Insurance Act; The International Banks Act, and regulatory legislation including the Registered Agent and Trustee Licensing Act, and the Money Laundering (Prevention) Act. The collective nature of the laws is unique in that they are formulated to provide an effectively regulated environment, in conjunction with satisfying the demands of the client.

*The IBC Act has the distinctions of allowing an election either to pay tax at 1% or to be exempted, as well as having an annual license fee of only US$300 regardless of the stated capital of the company. The IBC Act has the added advantage of being treated as an LLC or Limited Life Company. The most significant factor in the suitability of the IBC to provide the LLC-type flexibility is Reg.301.7701- b (8)(i) of the US Internal Revenue Code, 1986, as amended, which lists various countries and the types of entities in those countries as being corporations. Where an entity is listed, absolutely no election can be made under the entity classification rules (commonly referred to as "check-the-box") to treat these entities as anything but corporations. St. Lucia is not listed in this Reg. and as such corporations formed in this jurisdiction can make an election.

One niche area for St. Lucia has been in insurance. The legislation for this product is very flexible and allows captives companies to be established. The annual fees are amongst the lowest in the industry and the professional service infrastructure is rapidly developing. In fact insurance managers from other jurisdictions are using the jurisdiction and in some cases relocating parts of their operations to St. Lucia. Being excluded from the Mexican black list has also been a major drawing card for the island and it is felt that in this area St. Lucia will soon be a major player amongst the higher end jurisdictions. With the increasing use of insurance vehicles for tax planning and asset protection by the US market, professionals, middle sized businesses and individuals in the US are ready targets for a St. Lucian offshore insurance company.

Trusts formed under the International Trusts Act will be able to benefit from aggressive, well thought out asset protection provisions that are in line with other competing centers.

The Mutual Funds Act allows for private and public funds that can be constituted either as IBC's or as unit trusts.

The Money Laundering (Prevention) Act serves to ensure that both the local institutions and those engaged in international financial services are aware, trained and prepared to detect and prevent this harmful activity, with a particular emphasis on the 'Know Your Customer' theme.

Regulation of the industry is carried out by the Director of Financial Services and the Financial Services Supervision Unit or FSSU. This is a dedicated regulatory body responsible for the licensing of local registered agents (LRA's) and higher end entities such as banks, insurance companies and mutual funds formed under the offshore suite of legislation. Not only does the FSSU license the applicants, it is also responsible for the ongoing supervision and monitoring of these entities to ensure that they are solvent and not involved in money laundering or related activity.

There are 130 persons admitted to practice as Barristers in St. Lucia. As the profession is fused, these persons also carry the designations of Solicitor and Notary Royal. Most of these lawyers are part of long standing law firms with established reputations and international networks. The Accounting profession is also very well represented with about 100 qualified accountants. These persons are employed in large commercial organizations and in the big five firms, four of who are represented in the island. As is common in the offshore centers, all of the 10 registered agent companies are owned and run by accountants or lawyers.

Compared to other offshore centers, the island's human resource base presents a major advantage. There is a well-developed educational infrastructure, fashioned on the United Kingdom model. The work culture has been both heavily and positively impacted by a strong international commercial presence including several international banks and other business interests. There is a semi professional core and strong middle management that has been nurtured in the private sector and also in the civil service.

St Lucia's human resources offer a skilled pool of labor at a lower cost than more developed offshore jurisdictions such as Bermuda, Cayman and even Barbados. This makes establishment of service provider entities less expensive and far more expedient as most if not all of the staff required can be obtained locally. Therefore for back office operations for fund administration, asset management or other offshore services, St. Lucia has the level of skill at a cost that makes it an obvious choice.

Further the government is committed to the sustainable development of the sector and there are provisions to allow tax concessions for persons employed in the sector provided certain criteria are satisfied. This makes the island very attractive to international investors wishing to establish a substantial presence in a financial services center.

St Lucia's unique public online registry has proved to be both an efficient and effective system. It allows individual clients, (LRA's), their overseas agents, and the registrar of IBC's to carry out a variety of functions based on their respective roles and the control that a registry system requires. The Internet deployment and state of the art technology allows these functions to be carried out from anywhere in the world from any Internet ready computer. Such functions in the past could only have been completed by physically visiting a registry or through traditional communication methods. Functions include:

Name Searches - allow the user, at no cost, to determine whether a name is available for reservation and eventual incorporation.

Name Reservation - the ability to reserve names for 30 days to use for future incorporation of an IBC.Company formation - the user can complete, review and submit an IBC incorporation application to an LRA that the user is able to select online.

LRA's are able to complete online the incorporation process by reviewing and submitting IBC incorporation applications to the registrar.Messaging and Information - provides to a user instant notification of his/her IBC incorporation and immediate access to that IBC's register.

The register is a one-page document, which provides a summary of the public information that relates to each IBC. This includes the date of incorporation, the registered agent, and the memorandum and articles of association, but not the shareholder or director identity, as these do not form part of the public record.Company Register - view free of charge the register of any company with which s/he is associated, either as a client an LRA or an Overseas Agent.Online Search - a user can request and view online the register of any IBC incorporated in St. Lucia.

Request Certificates and Certified copies - for a fixed fee all public information will be copied, certified and couriered to the person making the request.

Payment for registry services may be done online through the use of a credit card. Considerable effort has been invested to ensure the system is secure and that an unparalleled level of service is provided. All online transactions are safe and supported by the best latest technologies available including Secure Sockets Layer (SSL) 128 bit encryption security which is the highest commercial data transfer encryption security available worldwide. Though there are some territories promoting the online registry concept, this is often limited to merely name reservation and or access that are limited to local service providers and their agents. None of them are public; therefore the client does not have any access to his company records or to other registry data. Therefore Pinnacle St Lucia has established itself as a pioneer in the financial services market becoming the 'Worlds only Public online IBC Registry.'

The island is politically and economically stable, with thirty years of democratic rule, independence since 1979 and a member of the Commonwealth of the British Empire. The island has a diversified economy maintaining healthy primary, secondary and tertiary sectors. Traditionally agriculture and in particular bananas were the main economic contributors, though this has evolved over time and in particular in the last ten years as tourism has boomed. At present several major international hotels are established on the island endorsing the confidence of international investors not only in mobile services, but also in substantial hotel and real estate investments.

Even in the promotion of the sector the island has taken a novel approach. The government has contracted with a private sector promoter to market the jurisdiction and establish the image and networks required for attracting reputable business and facilitating long-term success. This entity, Financial Centre Corporation has been actively carrying out its mandate and importantly working with the local registered agents, international service providers, industry experts, and publishers to inform and attract clients and their advisors to the territory.

St. Lucia has thought of everything the client and his advisor may require of an offshore centre. The legislation and human resource base certainly set St. Lucia apart from the competition and will be a major factor in the success of this jurisdiction in this competitive industry.

For info contact: Anthony Bristol Deputy Managing Director Financial Centre Corporation NIS Building, Ground Floor, Waterfront Castries, ST. LUCIA WEST INDIES Tel: +1 (758) 455 7700 Fax: +1 (758) 455 7701 E-mail: fcc@candw.lc