Treasure hunt - With passing of bills, Jamaica goes after US$7-trillion international financial services market
Two bills that are deemed to be of importance in making Jamaica an International Financial Services Centre were yesterday passed in the House of Representatives.
The General Partnership and Limited Partnership bills, which were passed, are among seven bills that have been proposed.
The International Financial Services (IFS) sector is estimated to manage private financial wealth in excess of US$7 trillion on a global basis.
Anthony Hylton, the investment and commerce minister, in piloting the bills through the House, said the quest to establish a modern financial services industry in Jamaica has synergy with moves to make the country a leading node in the global logistics chain.
"This comes at a time when Jamaica is making strides to also establish itself as a major node in the global logistics and trading system. In this regard, the establishment of Jamaica as a global financial services hub is in step with, and mirrors the initiative to transform the country into a global logistics hub, and build-out a logistics-centred economy," Hylton said.
Karl Samuda, the opposition spokesman on commerce, said the bills are "among the most far reaching to come to this Parliament".
He said that the International services centre, the foundation of which was laid during the last administration, "lays the foundation for a tremendous opportunity for earning" for highly skilled professionals in Jamaica.
Hylton said that Jamaica has an extremely strong cadre of experts that will support the IFSH.
"We have significantly more skills in the areas of accounting, law, corporate secretarial practice than other regional jurisdictions, our telecommunications infrastructure is more sophisticated and robust than most, we are easily accessible by air within 1 ½ hours of the U.S. mainland and we have significantly more facilities to accommodate meetings, conferences etc. than our neighbours who have made a success of this industry," he said.
Hylton said the legislation is done with a view to creating a new sector of business for the island which, instead of eroding the tax base, would generate further revenue for the Government of Jamaica through fees derived from company incorporations, registrations, regulatory licences, and work permits for expatriate workers.
He said that Jamaica is aware that there are negatives associated with the industry such as tax evasion, money laundering, lack of transparency and profit shifting.
He, said, however, that Jamaica, as a new entrant, does not have an image of fostering illicit activity amongst its potential customer base.
"With no legacy tax haven issues, and no interest in developing a regime that relies on secrecy, Jamaica has a competitive advantage in the current global regime, and is set to take advantage of emerging opportunities as a well-regulated and stable business services hub, with modern legislation, and high standards," Hylton said.
He said that the country is positioning itself to become a well-established, strongly regulated and transparent international business and financial services hub (IFSH) which offers world class business support and financial services to the global marketplace.
"The regime that Jamaica is seeking to create will not depend on a no-tax or nominal tax environment for its viability. Jamaica is not seeking to create an environment in which investors merely create entities through which to hold operating entities outside of Jamaica. But rather, the objective is to attract investors who will leverage the many attributes that Jamaica has to offer through which they will pursue near-shore services to support their global operations," Hylton said.
The minister told Parliament that the recently passed Special Economic Zone Act will serve as a magnet for multi-nationals that will seek to take advantage of Jamaica's status as both financial services hub and a global logistics hub.