Offshore

THE FIJIAN Government is be lieved to be considering establish ing a finance centre in Suva with all the provisions of a tax-free haven similar to those operating in Vanuatu, the Cook Islands and several Caribbean islands.

The significance of the Fijian move is that the finance centre would almost surely prosper at the expense of the other island offshore banking systems especially Vanuatu, which is plagued by poor air links with the outside world and concerns about whether its communication system can keep pace with modern banking needs.

Fijian Prime Minister Ratu Sir Kam isese Mara is to be given a full outline on the finance centre proposal, which has been compiled by a prominent South Pa cific business figure. It is understood that Ratu Mara and his cabinet colleagues are friendly toward the idea; the Reserve Bank of Fiji has apparently opposed the idea, but that opposition is weakening.

Last December, the Suva Government announced tax free zones for companies establishing factories producing for ex port, and the finance centre would be con sistent with Fiji’s desperate attempt to rebuild the economy. A financial institu tion in Fiji would have obvious advan tages: it is the hub of the airline system of the South Pacific, with regular flights to

overseas countries, including Australia, New Zealand and the US. It has a well-de veloped communications system and commercial infrastructure; Vanuatu, in contrast, has only a couple of fights a week to Australia and its only other significant air connections are to Fiji, Solomon Is lands and Port Moresby, The finance centre in Port Vila offers foreign companies freedom from personal and company tax, capital gains or death duties. There is also a “flag of conven ience” shipping register, In the past, Fiji would have been sen sitive to the opinion of its major neigh hours, notably Australia, which view these tax havens as depriving their own trea suries of tax. This concern can no longer be considered a major factor in the minds of the Fijian Government. □