ST. LUCIA Update December 2001
By: Nicholas John

In January 2000 we saw the birth of St. Lucia’s International Financial Services Industry with the coming into force of seven (7) pieces of legislation designed to make the jurisdiction a modern center for carrying out international financial services at acceptable international standards. The first licenses to practice in the industry were issued in March of 2000 so the center did not start to operate until about June of that year. The past 18 months have therefore focused on establishing a solid foundation for the future development of the jurisdiction.

The initial set of legislation that launched the jurisdiction includes:

the Registered Agents and Trustees Licensing Act

the International Business Companies Act

the International Trust Act

the International Banks Act

the Mutual Funds Act

the International Insurance Act

the Money Laundering (Prevention) Act.

The legislative package is innovative, flexible and designed to meet the ever-changing requirements of the international financial community.

One of the pillars of St. Lucia’s international financial services packages is the International Business Companies Act. This piece of legislation offers a wide range of competitive advantages. International business companies are exempted from income taxes, duties and exchange control restrictions. However, an international business company may elect to pay income tax at the rate of 1% of its net profit, if this will better meet its specific requirements. Asset security is provided through the ability to transfer domicile. Confidentiality is provided by there being no requirement to file particulars of shareholders and directors or accounting information with the Registrar of International Business Companies.

A St. Lucian international business company offers ease of operation, maintenance and control. It can, re-acquire and re-issue its own shares; issue shares for consideration other than cash; have only one shareholder; have a single directorate; have corporate directors or shareholders; hold shareholders or directors meetings and maintain books of accounts, records and minutes outside of St. Lucia; and hold shareholders or directors meetings at the discretion of shareholders and directors. In the first eighteen months of operations the jurisdiction was able to register over 300 international business companies.

The International Trust Act governs the establishment and operations of international trusts and is an amalgamation of the more progressive international trust legislation of various jurisdictions, combined with innovation provisions to form a totally unique product. The Act provides for the creation of several types of trust including:- purpose, charitable and spendthrift or protective trusts.

The International Banks Act provides for the establishment of international banks with a Class "A" general license or a restricted Class B license. The Act has a strong built-in regulatory framework to ensure that the banks licensed under this piece of legislation can be properly monitored to safeguard depositors’ funds and ensure that the banks maintain acceptable accounting standards and satisfies capital requirements. During the year 2000, St. Lucia was able to attract one (1) major offshore bank to the jurisdiction. In addition most of the International and local banks that were operating on a domestic level opened up separate departments to provide international banking services under the legislation.

The provisions governing the establishment of insurance companies are very attractive and the 18 months saw the establishment of six (6) captive insurance companies with a number of pending applications.

Perhaps the most innovative aspect of St. Lucia’s international financial center is it’s on-line international business companies registry – Pinnacle St. Lucia "the world’s only public on-line IBC registry". The on-line system enables a client to carry out a name search, make a name reservation, communicate incorporation instructions to a Registered Agent in St. Lucia, complete the incorporation application and view the particulars of a company incorporated on his behalf, from anywhere in the world using the worldwide web (the Internet). The client can also request certificates and certified copies of documents from the Registry using the on-line system.

Registered Agents can incorporate international business companies on-line with relative ease, speed and efficiency. Security and privacy are achieved and ensured by the use of the best and latest technology in firewalls and data encryption transfer security.

As part of its strategic plan for the development of the industry, the Government of St. Lucia has given the highest priority to the sensitization of practitioners to due diligence processes, programs relating to the "know your customer" principle and anti-money laundering programs. This approach, together with the legislation has enabled St. Lucia to stay off the Financial Action Task Force’s list of non-co-operative countries in the fight against money laundering.

For info contact: Nicholas John
Managing Director of the Hewanorra Fiduciary Services Group
Castries, St. Lucia, West Indies
E-mail: john.nic@candw.lc Website: www.offshorestlucia.com