October 30, 2012
Once again, the government is a day late and a dollar short. The Bahamas cannot be a regional hub for the Swiss banks because of major agreements coming into effect in May of 2013.
Switzerland signed sovereign treaties with the UK and Germany called "Abgeltungssteuer Abkommen″ (Withholding Tax Agreements) for Switzerland’s Private Banking Industry. Essentially this will drive the Swiss banking industry to white money which is taxed. The impact will be huge in terms of lower profitability. But one of the advantages is that an offshore booking platform will not longer be required. The domestic booking of Swiss banks can be handled in Switzerland over secure access.
We are chasing an outdated economic model as a tax haven, with less and less profits. We are now forced to go chasing untaxed money in South America, and that market segment won't last long either.
We would be better spent to upgrade the entire banking infrastructure, and open it up to foreign currency banking. This will never happen because the government doesn't have the vision to move beyond the status quo. The honourable Minister is way out of his league in terms of progressive thinking and structural vision.
In response to:
The Government has approached three leading Swiss banks about using the Bahamas as a “hub” for their Latin American region booking centre activities, a Cabinet minister yesterday saying he was confident the financial services industry was “poised for significant growth”.