By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas must accept that the financial services industry it has relied upon for decades is over, a well-known executive saying: “We are going to have to step up our game.”

Larry Gibson, vice-president of Colonial Pension Services (Bahamas), who was part of a panel discussion on the ‘Survival of the Bahamian Economy’, hosted by the Financial Analysts’ Society in collaboration with the College of the Bahamas, said so-called ‘offshore’ financial services were set to become history.

“We have to come to the realisation that financial services as we knew it is gone,” he said. “There is going to be tremendous turnover in that 15 per cent slice of our economy.

“We can’t have business as usual. Whether we like it or not, there won’t be an offshore financial sector any more. The mainstream financial sector, of which we will be a participant, will be services that are offered in any major city in the world. To survive in that environment we are going to have to step up our game.”

Dr Iyandra Bryan, managing director of Amicorp Bahamas Management, said this nation’s financial services sector will thrive once again if it can market its value-added attraction.

“Business is going to change in the respect that confidentiality from tax authorities can’t be the benefit that we scream from the mountain top,” Dr Bryan said. “That no longer works.

“We have the common reporting standard and automatic exchange of information. We know that our clients need to be compliant in their tax jurisdiction, and at this point we don’t want clients that are non-compliant.

“The business is evolving in the sense that our structures can no longer provide this old view of confidentiality, but there are quite legitimate and valid benefits we can offer. We can offer succession planning. We think that we can offer incredible succession planning benefits,” she added.

“We have done some research and it has shown that many of our clients are married with children, and one of their main concerns is succession planning. We have a value-added service we call asset protection. We have some of the best fraudulent disposition laws here in the Bahamas.”

Dr Bryan continued: “There are still legitimate benefits for having a structure in the Bahamas, but the clients we had that did not want to disclose or pay their due share of taxes in their tax residence are no longer going to be our clients, and that’s fine; we’re looking for tax compliant business.

“I believe that in 10 years the financial services sector will thrive if we can market these value-added propositions that we have, such as succession planning and asset protection. We have to be competitive. We have to offer them something they are not getting in other jurisdictions.”

The Bahamas was ranked as the third most popular company incorporation location used by the law firm, Mossack Fonseca, the source of the ‘Panama Papers’ data leak.

Millions of documents were leaked from Mossack Fonseca to a German newspaper, which contacted the International Consortium of Investigative Journalists (ICIJ) to help analyse the data. Mossack Fonseca is said to have played a major role in helping clients use offshore centres.