Public-private partnership: A marriage that works

By Sean McWeeney, partner, Graham Thompson & Co.

There is no denying that The Bahamas is now in full stride towards a new and exciting phase of its development as a financial services sector. Quite possibly it may prove to be the most consequential period of all. No more the tentative half-steps or ungainly gait of the past. Rather, decisive movement, high energy, sustained momentum and a clear and coherent vision of what it will take to get us on top – and keep us there – are signs that are everywhere in evidence in The Bahamas of the new millennium.

In keeping with its oft-stated goal of becoming the hemispheric leader in (zero-tax!) private banking, The Bahamas is already reaping handsome dividends from a whole new raft of recent legislative innovations; innovations which have helped consolidate the country’s reputation as a model of public-private sector collaboration and consensus when it comes to conceptualizing, structuring, legislating and then bringing to market the very latest and very best of what the non-industrialized financial centres of the world have to offer. In this regard, there is an authentic spirit of partnership and common purpose that undergirds the ongoing dialogue between the government and private sector – this in signal contrast to the mutual distrust and misplaced competitiveness that unfortunately infect corresponding relationships in many other countries.

With the exceptionally healthy state of relations between the public and private sectors, it should come as no surprise that recent years have witnessed the emergence of a plethora of new legislative products, including, most notably, (non-charitable) purpose trusts and foundations.

Professional advisors in onshore jurisdictions whose business it is to stay on the cutting edge of comparative legal developments in the offshore world will readily agree that the Bahamian regimes for purpose trusts and foundations represent superior offerings in every respect while having the added advantage of making The Bahamas a veritable one-stop-shop for all the wealth management needs of an increasingly sophisticated and demanding international clientele. Foundations, in particular, have already proven their utility in this regard, appealing, as they do, to professional advisors and clients in civil law jurisdictions where the Anglo-Saxon trust is still the very strangest of jurisprudential animals but where the foundation is well understood and, of course, tried and tested.

It is not entirely without irony that the development of new products has instigated a fresh look at the possibilities of some old ones, chief among them the company limited by guarantee without a share capital. Such an entity has long been an integral part of the company laws of The Bahamas but it is only just now that its adaptability to a great many wealth management scenarios is being fully understood and exploited.

That it is indeed possible for assets to be owned, managed and ultimately disposed of by a legal entity that has no shareholders, only non-equity holding members (complemented perhaps by a succession plan for prospective members), will immediately impress a multiplicity of inventive and perfectly legitimate planning possibilities upon the minds of professional advisors in onshore jurisdictions.

There is, of course, a great deal more to come, including the much heralded and eagerly awaited Private Trust Companies (PTC) legislation.

But none of this discussion of new products should deflect attention from the bigger picture which very simply is this that when you have collaboration and co-operative effort of the positive kind that is to be found in such abundance in The Bahamas today, there is no limit to what can be achieved for the common good of the country and financial services industry alike.

This certainly is the experience in The Bahamas today and it augurs well for its future as a leading provider of wealth management and estate planning services.

In sum, the public-private sector partnership in The Bahamas is alive and well.

It is a marriage that really works.