By NEIL HARTNELL
Tribune Business Editor
The Prime Minister’s call for the Bar Association to ‘open up’ to specialised foreign attorneys is 20-30 years past its sell-by date, a Bahamian financial services practitioner said yesterday.
Paul Moss, principal of Dominion Management Services, told Tribune Business that technology had made such a proposal obsolete, given that international attorneys could conduct business with the Bahamas from anywhere in the world.
“It’s a very old idea that was applicable in the 1980s and early 1990s,” Mr Moss said of suggestions that the Bahamas needed to permit specialist attorneys and law firms to practice from this jurisdiction.
“The change in technology has made that requirement obsolete. Lawyers consistently work with the Bahamas, even though they don’t live in the Bahamas.
“They are aware of what the products are, and the laws they can use, so they link with lawyers in the Bahamas to make these things happen.”
Mr Moss continued: “The idea to allow them to come in on work permits has been overtaken by technology. These lawyers can sit on the train and be in contact with the Bahamas; globalisation works.
“There’s no way that they’re going to leave London and New York to come here. The place is too small, the economy is too small, and the deals are too small. The bigger deals are being done in the industrialised countries.”
Perry Christie used last weekend’s Bahamas Financial Services Board (BFSB) conclave in Abaco to again urge the Bahamian legal profession to ‘open up’ to specialist foreign attorneys, suggesting this was key to growing an ‘international’ industry such as financial services.
Hope Strachan, minister of financial services, last year said her meetings with high net worth individuals and their advisers had revealed that the inability of foreign specialists to practice from the Bahamas was a major obstacle to the financial services industry’s growth.
Her call then for more openness, and an end to what was perceived as a ‘closed shop’, was met with strong push back from Bar Association president, Elsworth Johnson, and others.
However, attorneys such as Brian Moree QC, senior partner at McKinney, Bancroft & Hughes, and Bryan Glinton, partner at Glinton, Sweeting & O’Brien, have in the past backed the position taken by Mrs Strachan.
They argued that it would not involve an ‘open Sesame’ where all-comers would be admitted to the Bahamas, but rather the ability of foreign specialist attorneys to set up in practice here - either as individuals or firms, but in joint venture partnerships with Bahamians.
This would ensure there was ‘knowledge transfer’ to Bahamian practitioners, while overcoming what is perceived as a lack of specialist financial services attorneys among Bar Association members.
Messrs Moree and Glinton have also advocated that foreign specialist attorneys would have invaluable contacts, and possibly be key intermediaries in directing blocks of financial services business to come to the Bahamas.
Mr Moss, though, yesterday argued that the Bahamas should not get “bogged down” on opening up to international attorneys or any other issue, adding that there was ‘no magic bullet’ to spark sudden growth in the Bahamian financial services industry.
He argued that reforms required a multi-faceted approach, which addressed the industry’s physical and human resource infrastructure, and upgraded the “broken systems” referred to at the weekend by the Prime Minister.
“The Bahamas has absolutely refused to have an income or corporate tax regime, even though they had the opportunity when they opted for Value-Added Tax (VAT),” Mr Moss told Tribune Business.
“They could have gone with an income or corporate income tax for those companies that do transactions around the world, and could consider the Bahamas as a home and place to do business.”
Mr Moss argued that by agreeing double tax treaties with major industrialised countries, the Bahamas would be able to dispel the notion that it was a ‘tax haven’, and grant further legitimacy to foreign companies operating or domiciled here.
Double tax agreements ensure foreign company earnings are taxed only once, and at a lower rate, in international financial centres (IFCs) before they are repatriated back to their home jurisdiction.
This is why Barbados has, for example, become popular as a Caribbean domicile for Canadian companies. The Bahamas, though, cannot currently compete in this market because it has no income or corporate income tax.
Mr Moss said the US presidential primary debates had been dominated by concerns over the outsourcing of US jobs to overseas countries, a trend that resulted at least partly from that nation’s 35 per cent corporate tax rate.
“Those companies won’t come to the Bahamas,” he said. “The Bahamas doesn’t have any tax, but they still don’t come.
“If we want to grow the financial services industry, we mist reconfigure the tax regime. That’s what we must do.”
Mr Moss said he had introduced several Indian clients to Cabinet Ministers, who had delivered the message that they wanted to do business with the Bahamas, but needed a double tax regime first. The Government, he added, had yet to act on this advice.