Selling a tax haven

tax haven

WESTERN Samoa’s off-shore banking centre is now operat ing, and the country has begun an international search for customers.

Promotional efforts have been under taken in Hong Kong, Hawaii and Mexico City, but the centre’s foreign companies registrar, Stanley Uren, said there had already been considerable interest from Europe. It is understood that more than

30 companies have already registered in

Apia under the new tax haven legisla tion.

Uren held a similar position with the Vanuatu government’s finance centre for eight years before moving to Western Samoa late last year. He told Pacific Is lands Monthly that he considered the Western Samoa legislation the best in the world, and the country would appeal to many investors because of its political stability. He said many companies which had originally set up in Port Vila had

been disappointed by the political events

in Vanuatu, while the Cook Islands did not offer the infrastructure to back up its finance centre.

Uren’s first task upon arrival in Apia was to redraft the legislation already pas sed by the Western Samoan legislature, the Legislative Assembly. He said the law contained mistakes and omissions, and it has now been amended and reprinted.

One source of business will not be available to the new finance centre: Au stralia is now preparing to change its tax laws to prevent its nationals from taking advantage of tax havens, and New Zea land is expected to follow suit. The Au stralian move, while foreshadowed for some time, gained urgency when it was revealed that some major corporations, including Australian Airlines and Bond Corporation, were using companies in

the Cook Islands as part of their finan cial structure.

It will cost just US$4OO to register a company in Western Samoa under the International Companies Act 1987. Such companies will be exempt from income or other taxes, there are no currency or exchange controls and no levies on the remission of currency from Western Samoa. No tax treaties have been en tered into with any other country. Secre cy provisions are also strict, and violation can result in up to five years in prison or a fine of SWSSO,OO().

Incorporation of an international com pany takes no more than two days, no government fee is payable or prior approval required. There is no mini mum capital reuirement and shares may have a par value or be of no-par value.

There need be only one director, although there must be a residential secretary which may be a residential trust company or an officer of a trust company. Already one trust company has opened its doors in Apia: Asiaciti

Trust Company Ltd, which also has offices in Port Vila, Hong Kong and Singapore. European Pacific Trust Com pany (Western Samoa) Ltd, which is associated with the main trust company in the Cook Islands’ finance centre, has applied for a trust company licence in Western Samoa. Most companies reg istered in Apia under the new legislation will not need to appoint auditors.

Uren said the Off-Shore Banking Act 1987 had been framed to keep out the shell and “funny” banks. There are three classes of licence: the A licence will be granted only to companies with a paid up capital of SUSIO million, and may transact international banking business through an office in Western Samoa.

Uren said such licences will go only to banks with sound international reputa tion. An A-class licence holder may also operate as a bank within the country, and the government is looking to see one other major commercial bank open its doors in Western Samoa. This would be in addition to the two existing banks, Pacific Commercial Bank and Bank of Western Samoa. It is understood that the ANZ Banking Group Ltd is a leading contender for such a licence.

A B-class licence will go to companies with paid-up capital of |US2 million and these banks must operate through a reg istered trust company. They cannot accept deposits of less than SUS 100,000.

A 82-licence holder must have capital paid up of $U5250,000 and there are severe limits on the business it can trans act, it cannot solicit or accept deposits from the public nor can it have cheque facilities. All banks must be audited.

Meanwhile, the Western Samoan gov ernment is proceeding with improve ments to communications. By the middle of next year the number of international telephone circuits will be doubled. There are already eight accountancy firms, in

cluding Coopers Sc Lybrand and Price

Waterhouse, and six legal firms open for business in Apia. n

Apia: Western Samoa’s capital and new finance centre.