Offshore centre

makes its mark

WHAT does Western Samoa have in common with Vanuatu and the Cook Islands?

They are all islands in the Pacific.

Correct, but more than this Western Samoa has joined its Pacific neighbours as an off-shore financial centre, offering off-shore finance, banking and insurance.

Western Samoa established its off shore financial centre in September 1988 but it was only after June 1989 when the

updated legislation was printed, that it was able to operate properly. The Gov ernment wanted to ensure the legislation was right and everything was in place to ensure the Centre’s success.

As Minister of Finance, Tuilaepa Sailele Malielegaoi, explains “its development and promotion has been deliberately contained as the Government was anxious to ensure that the legislation was right, that the public sector infrastructures were in place and that sufficient steps had been taken to build up the credibility and confidence needed to make the Centre a success.”

“I am satisfied that the above has been achieved and with the other benefits Western Samoa can offer resonable fees, economic and political stability, good communications, quick and ef ficient registration, and an advantageous time zone the offshore centre can now be vigorously promoted as an attractive and competitive offshore centre jurisdic tion.”

According to Erna Vaai, the Registrar of International and Foreign Companies, they already have more than 1000 companies on their registrar. At US$3OO a company, it is big business.

Vaai says they have been doing a lot of promotion in the Asia region, especi ally in Hong Kong. They tied in their promotion with the Hong Kong rugby sevens tournament last year and will do

the same again this year. It was an added bonus when the Manu Samoa side

toppled reigning champions Fiji last

year. Vaai is keeping her fingers crossed this year.

The Office of the Registrar has done promotions in Eastern Europe as well as placing several advertisements in offshore investment magazines and journals. Vaai realises that as a relative new-comer on the off-shore investment scene, Western Samoa needs to promote herself

vigorously to compete with the many similar centres worldwide.

One advantage Western Samoa has is its favorable time zone, allowing a company to be registered the same day or even the day before. Also the closeness to Asia, compared to many other centres is a plus thus the concentration on Asia.

The offshore centre has the advantage of having not only the support of the government but also of the main oppo sition party. When the offshore legis lation was first enacted the present opposition party was in power and introduced the legislation to parliament.

It makes sense to support the centre because of the benefits to Western Samoa. It is a source of foreign exchange revenue. Each company pays a fee on incorporation or registration and there

after annually. Also some companies may be granted licences to carry on banking insurance or trustee company business.

For these licences an annual fee is payable. Any trust registered pays an annual fee. There are also various other fees which are payable.

Potential revenue from the center depends on how successful its develop ment is. When you consider other established off-shore centres, the poten tial is enormous. The Cook Islands’

revenue within five years of establishment was over US$5 million a year, Vanuatu’s relatively small offshore centre raises more than US$l million. Carib bean and West Indian countries raise more than US$2O million annually.

Western Samoa benefits in other ways. It gains world exposure which can benefit tourism and trade and may attract offshore investors to invest on shore. The commercial transaction put through the banking system ben efit the local banks.

Employment is created in trustee company offices and in other professional firms. Capital expenditure is incurred which results in more money being spent locally.

Basically it creates greater economic activity and international awareness which will grow as the off-shore center

develops. There is nothing stopping the

Western Samoa financial centre develop ing and being as successful or more successful then its Pacific neighbours.

Should you require more information on Western Samoa’s financial centre you can contact Erna Vaai at The Central Bank of Samoa PO Box 3265 Apia Western Samoa Ph. (685) 24071; Fax (685) 20880. □

Martin Tiffany Downtown Apia: home of the off-shore financial centre