In a public forum held at the Teachers’ Resource Centre on the evening of Tuesday, December 18th, the Ministry of Finance, Economic Development, Commerce, Investment and Tourism sought to inform stakeholders in the financial services industry concerning proposed amendments to the International Business Companies Act, as well as the Limited Liability Companies Act, the Limited Partnership Act and the Companies Act.
The amended legislation, which is expected to take effect in January 2019, will introduce substance requirements for certain companies and limited partnerships which are registered and tax-resident in Anguilla, and engaging in “relevant activities”.
It is important to note that such “relevant activities” pertain primarily to businesses within the scope of Banking, Insurance, Fund Management, Financing, Leasing, Headquarters, Shipping, Intellectual Property, and Distribution and Service Centre.
The Chairman of Tuesday’s meeting was Mr. Lonnie Hobson, Deputy Registrar of Commercial Activities. Opening remarks were made by Mr. Larry Franklyn, PS in the Ministry. Mr. Franklyn stated:
“As financial industry professionals you know the reason why we are here at this l
ast hour before the end of the year. Pressure is being placed on Caribbean jurisdictions to adhere and live up to the criteria being set by the EU and more powerful entities that are forcing a particular kind of behaviour and a parti
cular kind of outcome with regard to tax transparency in a number of smalle
r jurisdictions.
“Anguilla was assessed in March of this year, and we were able to prevent ourselves from getting on the black list at that point in time, but the EU then set a number of time lines by which we are required to make certain changes to ensure that there is substance with an acceptable level of tax transparency and fair taxation.
“So, we have been given a mandate from the government to ensure that Anguilla is in compliance. Government has made certain commitments to ensure that we implement legislative measures to ensure that entities registered and tax-resident in Anguilla have sufficient economic substance.”
The main facilitator for the forum was Marissa Harden-Hodge, Compliance Manager for the Government of Anguilla. In part, she expressed: “In 2016, the European Union adopted criteria covering tax transparency, fair taxation and anti-base erosion and profit shifting requirements against which countries were assessed during a screening process conducted by the Code of Conduct Group (COCG) during 2017.
“Anguilla was screened during this process and the COCG identified concerns around Criterion 2.2, which requires that the jurisdiction ‘should not facilitate offshore structures or arrangements aimed at attracting profits which do not reflect real economic activity in the jurisdiction.’
“The Government of Anguilla committed to introduce legislative measures to ensure that Anguilla have sufficient economic substance through the imposition of substance requirements and additional reporting obligations (by companies concerned) by the end of December 2018. Other jurisdictions would have been similarly screened, and it is expected that similar legislation will be enacted by all Criterion 2.2 jurisdictions…which include the Cayman Islands, the British Virgin Islands and Crown Dependencies.
The Government of Anguilla remains fully committed to ensuring that Anguilla will not feature on any EU list of non-compliant jurisdiction.”
