By NEIL HARTNELL Tribune Business Editor THE ABILITY to file liens in the public registry against the shares and assets of International Business Companies (IBCs) makes these vehicles "a little bit unique and creates an advantage" for the Bahamas, a senior attorney noting they were "more regulated" than domestic companies. Bryan Glinton, partner in the Glinton, Sweeting & O'Brien law firm, said that despite the "total revamping" of the IBC Act in the wake of the Bahamas' 2000 'blacklisting', and the fact they were more heavily regulated than Companies Act firms, regulators were still reluctant for Bahamians to use these vehicles. Attributing this to historical reservations about what IBCs may be used for, and the fact Bahamians were prohibited from having beneficial equity interests in them pre-2000, Mr Glinton said service providers acting as registered offices for domestic companies faced nowhere near the amount of regulations IBC officer providers did. Recalling the 2000 legislative reforms at a Bahamas Institute of Chartered Accountants (BICA) seminar, Mr Glinton noted how they ended the 'ring fencing' regime that allowed foreigners, but not Bahamians, to own equity/beneficial interests in IBCs. "Government was required to totally revamp the IBC regime," he explained. "Bahamian can now own shares in IBCs. Bahamians can use IBCs to conduct or engage in business domestically. "But interestingly enough, despite the fact the Government removed the ring fencing, there were a lot of financial institutions that did not want to touch IBCs, because Bahamians had traditionally prohibited from using them. "Regulators also had doubts about using IBCs. There was certainly a push back by some of the regulators..... But what I have found is that some regulators are getting a sense of comfort with it. It's happening with the Central Bank, finally; they are easing into it." While banks and financial and corporate services providers had, by law, to be incorporated as Companies Act companies, Mr Glinton added: "Surprisingly, post-2000, IBCs are now more regulated than domestic companies incorporated under the Companies Act and, despite the fact they are more regulated, regulators are still taking a more 'hands off' approach when it comes to IBCs." Service providers offering registered office and director services had to comply with regulations specifically targeted at IBCs, Mr Glinton said, with the names of registered officers and directors filed, and subject to on-site examinations. "Right now, we have no legislation governing someone providing office services for domestic companies," he added. "We now have an environment where if you take on an IBC client, you have to do due diligence and comply with anti-money laundering, but those regulations do not exist for domestic companies." IBC's continued to have "more flexibility" than Companies Act companies, Mr Glinton said, and remained "a great vehicle" for Bahamians and international investors alike. He added, though, that the Government "inadvertently" seemed to have left "an unusual provision" in the IBC Act as it exists now. "If Bahamians use IBC vehicles as holding structures they're fines, but if you're using IBCs to carry on domestic business, you have to go to the Central Bank to get approval," Mr Glinton said. "They're certainly more regulated than domestic companies." Yet among the advantages Bahamian IBCs continued to possess, when compared to domestic companies, were that there were no annual general meeting (AGM) requirements; they can have a single shareholder; one director as opposed to two; and there was no filing of information on shareholders. And, Mr Glinton said, Bahamian IBCs also provided the financial services industry with a "unique" competitive advantage. Unlike the Companies Act, IBCs were not limited in the financial assistance they could provide to shareholders and affiliates, or in giving loans to companies they had no direct interest in. "It's pretty flexible in terms of being able to do that," Mr Glinton added. "The IBC Act also allows people to file liens against shares and assets of IBCs in the public registry." This, Mr Glinton said, would allow IBCs and their beneficial owners to pledge its shares as collateral to lenders. The latter's interest could then be registered in the public Companies Registry, enabling lenders to take a charge over the IBC's shares or assets, and avoid having to go the more costly, time-consuming route of a mortgage or debenture. "That makes it a little bit unique and creates an advantage," Mr Glinton said of Bahamian IBCs.