By: Ainsley Brown
Jamaica is set to hire global legal giant Baker & MacKenzie (Baker) as its consultant on its new International Financial Centre (IFC).
The deal, the details of which are still immerging, is subject to Cabinet approval and would see Baker advising the Jamaican government on the best ways to implement the IFC in this current economic climate. The move by Jamaica, to open an IFC, at this time may come as a surprise to most, given not only the current global economic situation but also the increasing drive of my counties, namely the G20 and Organization for Economic Co-operation and Development (OECD) countries, to scrutinize offshore financial centres – just take a look at the tax coverage here on Commercial Law International to see what I mean.
However, it is important to note that an IFC is not necessarily a tax haven or better put a vehicle for tax evasion. An IFC could still be a “tax haven” but be a vehicle for legitimate – read legal – tax planning. Additionally, the movement of capital from one jurisdiction to another is not simply limited to tax reasons. Individual and corporation alike have many strategic planning reasons other than lower taxes; though I will admit that lower taxes are a great driver.
But what can Jamaica offer? If the prospect of lower taxes and non-disclosure are not going to be the cornerstone of the Jamaica IFC, then what will be? How will Jamaica differentiate itself from the Cayman Island, Bermuda or the British Virgin Islands? What will be the Jamaican way?
The answer sorry to say is: I don’t know. But I hope Baker does, I really do, especially given the costs of importing such talent and no doubt clout. Whatever the answer or answers Baker comes up with I fully support the idea of an IFC in Jamaica. It is an idea that is well over due. An IFC has huge potential to unlock and galvanize the vast underutilized intellectual capital of the nation. It position Jamaica has not just a regional but a global financial leader in specific offshore investment niches –perhaps in sports and entertainment?