DAVIDSON LAW OFFICE, LLP

Anguilla is a common law jurisdiction. Its judicial system is administered by the Eastern Caribbean Supreme Court the appeal process culminates with the Privy Council. The Court system is serviced by a number of firms of fully qualified and experienced lawyers. The professional infrastructure is well developed, with major accounting firms represented on the island. The telecommunications system is of a world standard providing direct access worldwide. Anguilla has enacted modern statutes relative to pro-business interests, including an LLC statute based on the Wyoming LLC statute, and recent revamping of the remainder of the significant business legislation.  The following relevant legislation can be found at http://www.anguillafsc.com/legislation.htm:  the Proceeds of Criminal Conduct Act; the Money Laundering Reporting Authority Act; the Company Management Act; the Trust Companies and Offshore Banking Act; the International Business Companies Act; the Companies Act; the Limited Liability Company Act; and the Limited Partnership Act.  

Anguilla is a neutral tax jurisdiction. There are no income taxes, no capital gains taxes, no estate taxes, no profit taxes, nor any other forms of direct taxation on individuals or corporations, whether resident in Anguilla or not.^[15] This makes Anguilla a very attractive location for financial services professionals to base themselves. The Government recognizes the desirability of expanding Anguilla's professional infrastructure and has recently established a program involving extended duration work permits and relaxed residency rules. In addition to the exceptionally favorable tax regime, Anguilla does not impose high registration or regulatory fees upon businesses organized there.  Incorporation or registration fees are $250 US and the annual fees for registered businesses are $200 US.  These are exceptional rates among the offshore jurisdictions offering tax-neutral regimes, as most other jurisdictions use higher fees in part to make up for foregone tax revenue.  Additionally, there are no exchange controls in Anguilla.  The US Dollar is a commonly used currency, although the official currency is the Eastern Caribbean Dollar.

Anguilla has studied the trusts legislation of many other jurisdictions, and, rather than amend the existing legislation, it was repealed and replaced the existing legislation with a new ordinance.  The Trusts Ordinance has its roots in English trust law, and provides a very flexible framework imposing few limitations on trust use. Specifically, the Ordinance permits commercial or charitable purpose trusts, unit trusts, spendthrift trusts, asset protection trusts and what are termed variant trusts. The Ordinance provides for a protector of the trust (who may be the trustee). The protector may be provided with the power to remove the trustee and to appoint new or additional trustees. The Rule Against Perpetuities has been abolished and accumulation of income throughout the full term of a trust is possible.

The Fraudulent Dispositions Ordinance provides that a fraudulent disposition is voidable by a creditor provided that the settlor was insolvent at the time of the disposition or became so as a result thereof and provided that the creditor commences his action within three years of the date that the assets were settled into trust. The burden of proving that the settlor was or became insolvent as a result of the transfer is on the creditor. In relation to asset (or creditor) protection trusts, therefore, Anguilla has deliberately taken a more conservative approach than some jurisdictions.  However, when a trust is created under the laws of Anguilla, the Court shall not vary it, set it aside or recognize the validity of any claim against the trust property pursuant to the law of another jurisdiction or the Order of another Court in respect of: marriage or its termination; succession rights; the claims of creditors in an insolvency; the imposition of any foreign tax or duty.^[16] Other characteristics of an Anguilla trust include choice of governing law and flight provisions.

Additional offshore business structures may take advantage of Anguilla’s favorable business climate.  Partnerships & Limited Partnerships are provided for in the legislation, and the government has positioned the Territory as a well regulated financial services center attracting only quality business. Generally, only subsidiaries or branches of banks with an established track record will be licensed as offshore banks in Anguilla.  The day to day regulation of the financial services sector is carried out by Department of Financial Services, which has adopted a firm but flexible regulatory approach.

Commercial confidentiality is provided for by statute in Anguilla, however, the authorities will co-operate with other jurisdictions in cases involving illegality. In common with other reputable jurisdictions, the Department of Financial Services is, subject to safeguards to protect legitimate business, able to share regulatory information with overseas regulatory authorities.

Anguilla already has a well established professional infrastructure. The Government recognizes that, as a relatively new jurisdiction, an expansion of the sector would benefit the economy. Applications from suitable professionals and organizations within the industry are, therefore, welcome. Any organization wishing to establish within the sector will be required to demonstrate that it is prepared to establish a real business on-island and a multi-year work permit program has been introduced to facilitate this. Alternatively, in the case of a licensed institution, an administered or managed basis for the issue of a license will be considered. This would entail the full management and administration of the licensee's business by an equivalent licensed institution on island.

B.        Cayman Islands

The Cayman Islands are an English-speaking Dependent Territory of the United Kingdom, located  between Cuba and Central America. There are two international airports, one in George Town, Grand Cayman and the other in Cayman Brac. “Six airlines fly to Cayman and there are daily flights to Miami and weekly flights to major North American and European cities.”[17]

Cayman is politically stable, like Anguilla, the Governor represents the Queen and assigns responsibilities to five elected Ministers of Government. Government revenue comes from customs duties, stamp duty and annual fees levied on corporations.   There are no taxes in Cayman.  Covering just 39 square miles, Cayman holds a population of 30,000. The economy is highly dependent on tourism, with financial services also important.   Offshore entities may be organized as Ordinary Non-Reisdent Companies, Foreign Companies, Limited Partnerships, Exempted Companies, Limited Duration Exempted Companies, Exempted Limited Partnerships, Trusts, or Exempted Trusts.

Cayman is the fifth largest financial center in the world,^[18]  and the largest offshore banking center with more than 600 banks and deposits of more than $1 trillion USD. It is the second largest captive insurance base after Bermuda, with assets worth $20 billion. The Cayman Islands trust sector is thought to manage more than $500 billion. Mutual funds are a growing sector, as well, since the opening of the Cayman Islands Stock Exchange in 1997. ^[19]  There is no exchange control. Generally, Cayman is an expensive jurisdiction with an established commercial infrastructure in place and a flexible approach to regulation.

Banking and commercial confidentiality remains very good in Cayman, though, a 2001 policy change, including the issuance of money laundering regulations and amendments to the Monetary Authority Law and the Proceeds of Criminal Conduct Law, allows for investigation of fiscal wrong-doing, at least when criminality is in evidence both internationally and in Cayman itself.  Additionally, under pressure from the EU as part of a Savings Tax Directive, in 2005 Cayman agreed to provide information about savings interest paid to EU citizens.  While the overall impact of this concession remains to be seen, the attitude in Cayman is to protect confidentiality so long as there is no demonstrable criminality.

While taxes are non-existent, Cayman is considered a relatively expensive jurisdiction in which to operate by way of substantial business licensing and regulatory fees. Under the Mutual Fund Law, investment or mutual funds with more than 15 members must be individually licensed, or must be administered by licensed mutual fund administrators. The Securities Investment Business Law aims to regulate the business of securities investment in the Cayman Islands and provide an appropriate structure for the regulation of securities brokers, including market makers, arrangers, investment advisors and investment managers. The fundamental objective of the law is to define activity that requires a license and to ensure competent administration. 

The Cayman Islands opened a Stock Exchange in July 1997 under the Stock Exchange Company Law 1996, specifically designed to attract mutual funds and specialized debt securities. Funds of funds and umbrella funds are both accepted, and there are no restrictions on investment policies. Funds can be established locally, or in a recognized jurisdiction, including the EU, USA, or Canada.   By 2004, over 700 issues had been approved for listing, with market capitalization in excess of $44 billion.[20]  The Cayman Islands dominate the global hedge fund industry as the venue of choice, with more than 80 percent of the world's hedge funds registered with the Cayman Islands Monetary Authority.[21]

Cayman banks must be licensed under the Banks and Trust Companies Law 1995 as amended in 2003.  The Cayman Islands banking industry has more than 600 banks,[22] of which about 30 hold Class A licenses permitting local and offshore business activity, while the remainder hold Class B licenses, permitting only offshore business.  Under Class B licenses a local office is allowed, but limited business may be engaged in locally.  The assets of Cayman banks exceeded $1 trillion as at March 2005.[23]   

The 65,000[24] offshore companies registered in Cayman include many treasury management or investment management subsidiaries of multinationals taking advantage of the excellent banking environment and absence of taxation.  Private banking is a major component of the industry, as well, with asset protection as the driving force rather than tax avoidance.  The stability of Cayman alongside stringent banking secrecy and its sophisticated investment environment are attractive attributes to wealthy individuals, particularly those from the US where Cayman has a good reputation.

Another major activity in the Cayman Islands for more than 30 years has been trust management, and trust assets are now said to rival banking assets.[25] Originally trusts were used primarily by wealthy individuals from the major common law countries, but it is now accepted as a major technique of asset protection in all parts of the world. Over the last 25 years the Cayman Islands have extended and adapted their trust laws to accommodate the growing market. Cayman offers a sophisticated community of advisers on trust matters.  Companies offering trust services must be licensed under the Banks and Trust Companies Law.

The Cayman Islands also operates Registers of Shipping and Civil Aircraft. George Town is a Category 1 shipping registry, entitled to register all classes of vessel. In July 1999 the new Merchant Shipping Law of 1997 went into force, embracing up-to-date convention requirements and a number of innovations that address some of the specific needs of the Cayman Islands. These include broader wider ownership rules, an extended demise charter, enhanced mortgagee protections, provisions for registration and mortgage of ships under construction, mandatory minimum insurance, anti-piracy measures and clearer exercise of due diligence in the registration, deletion and representation of ships.

C.        Bahamas

Just 50 miles off Florida, the island group that makes up this sovereign state, the Bahamas is right in our back yard.  The Bahamas offers several international airports and excellent port facilities, as well.  The official language is English on these 700 islands with 300,000 inhabitants.  With a stable, democratic government, lack of corporate and personal income taxes, close proximity to the United states, easy profit repatriation,^[26] the Bahamas is an attractive location for offshore enterprise.   The Bahamas is an independent nation-state which became independent from Britain in 1973. 

The Bahamas was a trust and tourist jurisdiction very early in the 20th century, but was relatively late in developing as a financial center. The economy is heavily dependent on tourism, with 4 million visitors per year, but financial services are growing in importance. The major business sectors in the Bahamas are banking and mutual funds.  Today the Bahamas banking sector is second only to the Cayman Islands among offshore jurisdictions.  There are over 400 banks in the Bahamas holding assets near $1 trillion.[27]  Trusts and insurance are also well represented in the Bahamas.  Professional services are excellent, and the shipping registry has been very successful for larger vessels.

The Bahamas is tax-free - there is no income tax, no capital gains tax, no value added tax, and no sales or use tax in the Bahamas.  Annual government fees are imposed on businesses and there are national insurance, stamp duties and property taxes. Local businesses are controlled by licensing and somewhat protected, although there are good investment incentives in some sectors.

Offshore operations take place through International Business Companies, Domestic Limited Liability Companies, Limited Duration Companies, Exempted Limited Partnerships, Foreign Companies, Trusts and Foundations. The term 'offshore' is not used in Bahamian legislation or in describing company forms. Prohibition from trading locally is the key factor allowing for the 'offshore' corporate forms.  As there are no general corporate taxes other than stamp duty, there is no separate 'offshore' sector as such in taxation terms.  International Business Companies and Limited Duration Companies are prohibited from doing business with Bahamian residents, but are allowed to maintain bank accounts, hold directors meetings, keep books and lease real estate for use as an office within the Bahamas.

There are exchange controls in the Bahamas, however, and the Exchange Control Act requires consent from the Central Bank for resident individuals and companies to conduct operations in foreign currencies. Likewise, non-resident or offshore companies, who are free to deal in foreign currencies, require Central Bank consent to deal in Bahamian dollars.  A scaling back of exchange controls is taking place, however, and it is the stated intention of the Central Bank to remove them entirely in due course.[28]

More than 80,000 International Business Companies have been formed in the Bahamas, many of them as holding companies for investment or trading activity in other countries. Since there are no corporation or income taxes in the Bahamas, it can be an effective financial base. The Bahamas remain  one of the most popular jurisdictions for these companies, because of the flexible International Business Corporation legislation, good secrecy, good reputation, and high-quality professional services.

Following increased international attention due to illicit uses of offshore bank accounts, privacy considerations are no longer as favorable in the Bahamas.  Bahamas passed the International Businesses Companies Act 2001 under which IBCs are required to submit their identities, addresses and names of directors and owners to the Registrar General's Department. A fall in new IBC registrations in 2001, however, has led to a review of this new regime.  Additionally, a Tax Information Exchange Agreement was signed with the US in 2002, and the new Bahamian government has emphasized its determination to maintain the Bahamas as a fully compliant international financial center. Dissatisfaction with the new legislation on the part of the financial sector is being dealt with through adjustment of the regulatory regime. 

Trust Management has been a major activity in the Bahamas for 50 years or more. As in the Cayman Islands, originally trusts were used primarily by wealthy individuals from the major common law countries, but it is now accepted as a major technique of asset protection in all parts of the world.  And the Bahamas, too, have extended and adapted their trust laws to accommodate the growing market over the more recent past.

The Bahamas established themselves as a shipping registry with the Merchant Shipping Act, and due to a combination of geographical, financial and operational factors have been very successful, building the fifth largest world fleet.[29] More than 1,500 vessels are registered in the Bahamas. The Bahamas operate a 'flag of convenience' registry, which does not impose minimum wage or nationality standards on its ships. However, the Bahamas registry belongs to the International Maritime Organization and adheres to its principal safety conventions.

D.        Barbados

Barbados is the easternmost of the Caribbean nations, sitting 400 miles northeast of Venezual.  Barbados is a politically stable independent island nation covering 167 square miles, with a population of 270,000.  Barbados was historically a sugar producer, but has more recently diversified into tourism, manufacturing, and financial services. In the last ten years the Government has been business-friendly and economically sound.[30]

Barbados has developed a range of offshore formats to meet varying needs.  A good US tax treaty has particularly encouraged US interest, Canada has been a traditional partner, as well. The offshore insurance sector is comparable to that of the British Virgin Islands, and there are more than 50 offshore banks, but mutual funds have not yet seen strong development.[31]   Along with its vast array of corporate formats, Barbados has a complex tax regime with a variety of taxes.  For Barbados residents the tax rates are relatively high, however, properly structured offshore business should be able to avoid high taxation in Barbados, as the average rates for International Business Companies does not exceed 2%.[32]  There is exchange control in Barbados under the Exchange Control Act, applying to inward investment, local borrowing by foreigners, and remittance of funds abroad. Transactions involving foreign investment are normally approved readily. Most types of offshore or nonresident entity and transaction are exempt from exchange controls. 

Barbados has a well developed international financial center.  For 25 years the Government has welcomed offshore business, and has consistently re-invented its legislative apparatus to keep pace with competition from other offshore jurisdictions. Barbados does not have any of the world's largest offshore business sectors, but has growing and successful communities in banking, insurance, and shipping, as well as IBC and trust business.  Mutual funds are a recent addition, and there is a stock exchange, which by the end of 2005 had capitalization of $22 billion USD. Some 8000 offshore entities were registered in Barbados at the end of 2005.[33]  Additional growth is expected in construction, transport, communications, and other services.  Barbados has encouraged commercial activity and manufacturing, especially in high technology. It has taken advantage of its physical location alongside the US.  The Government offers a wide range of investment incentives applying broadly under the Fiscal Incentives Act and other legislation, giving tax holidays up to 10 years, duty-free importation of materials, assistance with construction of factories, and other benefits.

There is a wide variety of company formats for the offshore organization to choose from, limited liability companies, external companies, international business companies, foreign sales corporations, offshore banks, exempt insurance companies, exempted limited partnerships, international trusts, shipping management companies, and societies with restricted liability.  The most widely used form, the international business companies, are exempt from stamp duty on transfers to other IBCs or non-resident persons; they are exempt from exchange control regulations; they are exempt from customs duties on goods and materials imported for their international business, and they are exempt from withholding taxes on payments of all types made to other IBCs or to non-resident persons. Foreign Sales Corporations are also exempt from corporation tax, from withholding tax on payments to non-residents, from customs duties on goods and materials imported for their foreign trade, from ad valorem stamp duties, consumption tax, and property transfer tax on the transfer of shares to non-residents. Their foreign trade transactions are exempt from exchange control, and they do not have to file tax returns. 

Barbados has established an offshore banking sector under the Offshore Banking Act, which provides for the licensing of offshore banks, and contains a precise description of offshore banking as obtaining of funds as deposits or through the sale of financial instruments, the use of such funds to give advances or finance investment, and the use of trusts to hold money or property. Offshore Banks pay corporation tax on the same basis as an international business company. They are exempt from withholding tax on payments to nonresidents or other offshore entities, from customs duties on goods and materials imported for their offshore business, from estate duties on any of their shares, securities or assets owned by a non-resident, and from property transfer tax on the transfer of shares, securities or other assets. Their offshore transactions are exempt from exchange control, and they are exempt from ad valorem stamp duty.

As in the other jurisdictions covered, trust management has been a considerable activity in Barbados for 30 years or more, much of it conducted by the trust departments of banks. Barbados enacted the International Trusts Act which provided a modern and comprehensive, business-oriented trust regime which has proven attractive to corporate users. There is a sophisticated community of professional advisers on trust matters in Barbados, as well.  Trusts are taxed as persons in Barbados, but an International Trust with nonresident settler and beneficiaries, and without Barbados real estate assets, will at worst be taxed only on income remitted to Barbados. If other Barbados offshore entities are trust beneficiaries, they are treated as nonresident. Efficient tax structures can be created using offshore trusts in combination with International Business Companies for international securities management. 

Barbados International Business Companies have been put to a variety of uses, but one of the most popular has been as holding vehicles for US real estate.  Taking advantage of the terms of the US/Barbados double tax convention, the IBC is only subject to the very low Barbados tax rate.  The US tax convention has anti-treaty-shopping clauses, but they are more favorable than many other double tax treaties.[34]  

The captive insurance industry is growing in Barbados, with more than 300 insurers licensed in  under the Exempt Insurance Act, annual written premiums of $2 billion USD, and assets of $10 billion USD.[35]   The US/Barbados tax convention allows for captive insurers to write business in the US and avoid substantial US taxation.  Attempts in the US Congress between 2001 and 2003 to ban tax deductions for 'expatriating' insurance companies, which threatened some aspects of the offshore insurance business have largely come to nothing, although the renegotiation of the US/Barbados Tax Treaty in 2004 has restricted the use of Barbados for 'treaty-shopping'.[36]  Exempt Insurance Companies  are exempt from income tax, capital gains tax, withholding tax and all other direct taxes on profits or transfers of assets or securities. They are also exempt from exchange controls, and no tax filings are required.

Barbados has been a member of the International Maritime Organization since 1969, and subscribes to all maritime safety and environmental conventions. The Shipping Act of 1994 established a Barbados Ships Registry. There are 34 vessels in the Barbados registry.  As is the case with other offshore sectors in Barbados, the Barbados/US Tax Convention provides favorable opportunities to US shipping operators, who can obtain domestic tax benefits by operating through a Barbados resident. 'Resident' is so defined that it includes an International Business Company managed and controlled from Barbados.[37]  Shipping Management Companies are treated as nonresident and are exempt from income taxes. Under the Shipping Incentives Act, which predates the Shipping Corporations Act,[38] shipping companies involved in the operation or leasing of ships, or in shipbuilding, are entitled to a number of tax benefits, including freedom from import duty on ships and materials used in building or repairing them, exemption from tax for dividends paid to residents, reductions in taxes for dividends paid to nonresidents, and full or partial exemption from taxes on profits.

E.         St. Kitts and Nevis

Former British colonies, St. Kitts and Nevis attained full political independence in 1983.  With and area of 101 square miles, and a population of 40,000, St. Kitts and Nevis boasts an international airport with direct flights from New York Philadelphia and Miami.  The government is relatively stable, though there is a potential peaceful secession of Nevis forthcoming.  The official language is English and the legal system is based on English Common Law.  

St. Kitts and Nevis’ economy has been traditionally based on sugar and banana production, however more recent legislative changes have enabled for positioning as an attractive offshore jurisdiction, as well. Although sugar still dominates the agricultural sector, activities such as tourism, export-oriented manufacturing, and offshore banking have assumed larger roles in the economy.

St Kitts and Nevis has offshore legislation as a Federation, but so does Nevis independently. On the whole, St Kitts focuses on attracting inward industrial and tourist investment, while Nevis concentrates more on offshore asset protection. Nevis has been particularly successful with its Limited Liability Company legislation and the Nevis Business Corporation Ordinance which is based on Delaware’s corporate statutes.  Although St Kitts has aimed primarily at attracting industrial and tourist investment with very tax-friendly incentive legislation, Nevis's achievements in attracting offshore companies inspired St.Kitts to establish its own offshore regime in 1996 with a new Companies Act and Trusts Act.

While St. Kitts-Nevis are relatively small and relatively early in their development of an international offshore financial center, they have a highly attractive confidentiality policy.  The Confidential Relationship Act of 1985 for St. Kitts-Nevis offers complete confidentiality should foreign authorities seek private banking and financial records. The Confidentiality Act safeguards investors by prohibiting disclosure of any information obtained in the course of business. The law is considered to provide the most rigid secrecy in the Caribbean region as it applies to banks and professionals as well as Government officials. Prison terms are mandatory for violation of the statute.[39] 

Offshore operations in St Kitts-Nevis may take place as Exempt Private Companies, Exempt Limited Partnerships, or Trusts.  If organized in Nevis, the International Business Company, Limited Liability Company, and International Exempt Trust forms may be used for offshore activities, as well.  As St. Kitts-Nevis represents a bifurcated jurisdiction it is important to distinguish which forms are available in which jurisdiction.  Whether under Federation legislation or Nevis legislation, offshore entities in St Kitts and Nevis are exempt from Corporate Income Tax, Withholding Tax and Capital Gains Tax, as long as they carry on business only with non-residents of the Federation. However, the various laws make it clear that an exempt entity does not lose its tax waivers because of certain activities within the Federation including signing contracts or concluding arrangements for employing residents, purchasing goods and services, and exercising other powers to carry on its business such as holding directors' and members' meetings, transacting banking and reinsurance business, and conducting securities transactions or serving as adviser to Federation residents who enjoy exempt status.  Along with the favorable tax regime, St. Kitts-Nevis requires modest registration and annual fees for most offshore businesses, comparable to those of Anguilla, with annual fees ranging from $200 to $220 USD. 

Offshore banking in Nevis is governed under its Offshore Banking Ordinance of 1996.  Offshore banking activities are taxed in Nevis at an average rate of 2%.  Licenses under the Banking Ordinance are issued to eligible companies or qualified foreign banks who meet minimum asset requirements. Non-domestic insurance and assurance businesses must be licensed under the Insurance Act.  Trust management has also become an important business for St Kitts and Nevis.  Like all offshore finance businesses in the Federation, trust management companies need authorization under the Financial Services Order of 1997.  Nevis trusts are formed under the Nevis International Exempt Trust Ordinance. The Trust Ordinance includes special provisions to enhance the use of Nevis as a preferred jurisdiction for the establishment of Asset Protection Trusts.

There is no personal income tax in St Kitts and Nevis but foreign nationals working in the country are required to obtain a work permit for which there is an annual charge of 1,500 East Caribbean dollars ($635). Persons or companies remitting payments to persons or companies outside of the nation must deduct a 10% withholding tax on profits, administration or management and head office expenses, technical service fees, accounting and audit expenses, royalties, non-life insurance premiums and rents.[40] There is no capital gains tax other than on short-term investments, but the St. Kitts and Nevis house tax of 5%, payable in two installments a year, applies on annual rental value of a property, with a 25% rebate on residential property. The controversial Alien Landowners Tax places a 14% levy paid by buyers and 4% by sellers on residences. Although it also applies to commercial land, it is subject to negotiations on a case-by-case basis. A 1% sales tax on gross sales, a hotel tax of 5% and a 2% tax on foreign currency transfers are in effect.

V.                 Summary

When considering whether an offshore enterprise may be beneficial, there are many factors to consider and many potential jurisdictions to choose from.  Several of the potential jurisdictions located in the Caribbean offer many advantages important to realizing the benefits available through an offshore operation.  This has not been an exhaustive survey, by any stretch, however, the jurisdictions discussed above all offer a host of  favorable provisions relating to most or all of the important factors when considering off-shoring.  Anguilla, Cayman, Bahamas, Barbados, St. Kitts-Nevis, and St. Vincent and the Grenadines all offer a stable and well developed financial services sector, and they all offer a strategic location advantage relative to the US for certain international trade type operations.  All offer tax and regulatory schemes in which offshore operations may realize substantial tax savings if properly structured.

Individual preferences and business needs will, of course, dictate the choice of offshore jurisdiction, but these jurisdictions have much to recommend them.  Where secrecy is the most important objective, consider an operation based in Nevis, where a breach of confidentiality is a criminal offense with mandatory prison time.  Business legislation is up-to-date, and provides for International Business Companies under legislation based on the Delaware Statute.  Registration and annual fees in St.Kitts-Nevis are minimal, some of the lowest in the region, and there are no taxes.  There is some political instability, as Nevis is in the process of seceding from the Federation, and the financial and transport infrastructure is in its early development stages, so the expertise and depth of services available may not be comparable to the Caymans or the Bahamas.

If international shipping is the most important factor, the Bahamas may be the most advantageous  location.  With the 5^th largest shipping fleet in the world, Bahamas is well placed to provide all services needed in connection with international shipping.  The Bahamas, too, is tax-free, however, moderate fees and duties are imposed on businesses located in the Bahamas.  The Bahamas offers well developed banking, trusts and insurance sectors, as well.  With modern business legislation, including International Business Company provisions, the Bahamas remains a popular destination for offshore operations.  The Bahamas offers limited confidentiality, as a Tax information Exchange Agreement with the US has been signed.  There are currency exchange controls in place in the Bahamas, as well, so free movement of currency is more limited.

Barbados, too, has currency exchange controls limiting movement of currency.  Barbados offers a smaller venue, but still provides for international shipping with a deepwater port, and a well developed international financial center.  Barbados imposes very low taxes upon offshore operations, and has a double-taxation agreement with the US, offering a good vehicle for tax savings for US residents.

If world-class financial services is an important factor, no offshore jurisdiction boasts greater depth of expertise than the Cayman Islands.  Cayman offers no taxes for offshore operations, along with modern business legislation and good financial privacy.  The renowned Cayman privacy may be eroding somewhat, however, as new EC directives have forced disclosure of savings interest for EC residents.  Cayman license and registration fees are a bit higher than other jurisdictions, however.

Anguilla, too, offers a well developed financial services center, no taxes for offshore businesses, good privacy, and, in addition, very low registration and annual fees.  Anguilla boasts modern business statutes, including International Business Companies and Limited Liability Companies, and Anguilla’s online ACORN system allows for instant business registration from anywhere in the world, 24 hours a day.

With all this available right in the Caribbean, realizing the benefits of an offshore enterprise suited to any particular business needs may be well within reach.