The Tribune

Editor, The Tribune.

I write to express my deep concern that this country is setting itself up to enter the deepest depression it has ever seen, leaving the majority of the population unable to afford electricity and food.

As a long-term resident with the right to own my own business, my attempts to finance a new business or obtain a bank loan secured on my own house have met nothing but negative responses.

My existing business as a financial and corporate services provider (FCSP) has seen at least 80 per cent of its clients cease their use of The Bahamas as a location for their International Business Companies (IBCs). In many cases they chose to form a Delaware company over the Internet at a cost of under $200 each, where no details of the owners are required. Such companies can open bank accounts in the US and elsewhere with minimal deposits and documentary requirements. This business used to be the lifeblood of the financial industry in The Bahamas. NO FOREIGN OWNER will allow his IBC to have a local director who must produce accounts. He will move his assets to Delaware, as thousands have already done.

What is our Government thinking? What benefits do we receive for agreeing to co-operate with the World Trade Organisation (WTO) and the European Union (EU) financial codes on KYC (Know Your Customer)? We are a sovereign nation fighting to protect our borders and our valuable air space, yet we are shooting ourselves in the foot.

Take this scenario:

1. We repeal the IBC Act and replace it with a new Companies Act to apply to all new companies. It is too late to apply it to existing companies, most of which have left this jurisdiction or closed their Bahamas bank accounts.

2. To bring accountants, lawyers and all financial institutions into a full reporting regime will be inflationary and lead to increased fees, turning more and more investors away from this jurisdiction and resulting in job losses for well-paid professionals. This, in turn, reduces the disposable income available to buy local goods and go to local restaurants. That is a recipe for economic collapse or devaluation of the currency. Each law firm now needs to employ so-called compliance officers? Why? If a foreigner wants to buy a Bahamas property, the Investment Board must receive the KYC documents as it is at present. Why change this system?

3. Are mutual fund managers, or mutual fund companies, with thousands of investors caught by the new proposals? Are the Cayman Islands profiting from this loophole of not being required to check every investor?

4. Are the BVI and Turks & Caicos facing the same rules imposed by the EU?

A foreign investor, when asked if he would invest in a Bahamas business, said "no" because of the corruption and time it takes to get an approval.

Most businesses in The Bahamas pay five taxes: Customs Duties; VAT; Business Licence fees; real property tax; and National Insurance contributions. These can add up to almost 30 per cent of gross revenue before salaries and rent.

VAT is being abused. Talk to shopkeepers: The honest ones and the greedy ones. Some just add 7.5 per cent to every invoice - from the import price to the wholesale price and the sales price, while not passing on the credit they receive when calculating their VAT tax return.

To set up a new business to manufacture a bike stand out of recycled plastic, owned 100 per cent by citizens and permanent residents of The Bahamas with the right to own their own business, has proved an almost impossible task. No one believes The Bahamas can manufacture and export anything. So we have decided to do all this in Canada, where a company will manufacture the tools needed at their own cost, and produce the initial 1,000 bike stands for export and sale all over the world.

What a pity. This item, if made in The Bahamas, would involve all sales being paid in foreign currency and banked here for increasing the business and employing more Bahamians.

If foreigners were enticed to invest in this business here, all profits would go to them and little advantage to The Bahamas economy except for the jobs and the bank accounts.

All these questions need answering before The Bahamas decides to give up its own sovereignty.

The only beneficiaries in this saga will be the lawyers, employed to challenge all the breaches of our constitutional right to privacy among other things.

FRUSTRATED

BUSINESS MAN

May 21, 2018.