Country report: Anguilla – Review 2007

By John O’Dyrud, First Anguilla Trust Company Limited

Anguilla’s position in the global offshore financial-services industry has never looked more promising. The main factors that set it apart are its stable constitutional position as a British Overseas Territory; its well regulated and competent financial-services industry; its status as a true zero-tax jurisdiction; and its market-leading, state-of-the-art, Anguilla Commercial Online Registration Network (ACORN), which expedites the company formation process.

The other factors on which Anguilla relies in order to maintain its competitive edge are the cutting-edge legislative framework for the types of offshore business likely to be in demand in the future and the availability of the necessary communications facilities.

E-commerce

Anguilla has been at the forefront of the Internet revolution. In November 1998, ACORN, Anguilla’s state-of-the-art online company registration system went live. Companies can be incorporated by authorised agents virtually instantaneously, 24 hours a day, 365 days a year, from anywhere in the world and cutting across geographical boundaries and time zones. In addition to company registrations, ACORN enables all other corporate registration activities – either required or permitted under the appropriate company legislation to be undertaken online.

Anguilla also has one of the highest per capita penetrations of information technology in the world. In addition, this penetration is diffuse: it pervades the public and private sectors; schools and homes; and domestic and offshore businesses.

A major potential advantage of Anguilla as an e-commerce situ is that it is one of the few true ‘zero tax’ jurisdictions. Unlike many of its competitor jurisdictions there are no income, corporate or inheritance taxes of any kind. This means that companies formed under the Companies Act (including the Anguilla Business Company) can conduct business locally without any liability to local taxes. In most of Anguilla’s competitor jurisdictions it is necessary to do business through an International Business Company (IBC) to secure freedom from taxation, but an IBC is (by definition) precluded from trading within its jurisdiction of incorporation. A domestic business company would need to be used, which would be subject to local taxation.

Telecommunications

Telecommunications in Anguilla were ‘de-regulated’ by enactment of the Telecommunications Act 2003. The government has also published a forward looking telecommunications policy entitled: ‘A New Telecommunications Regulatory Framework for Anguilla’. In the words of its opening paragraph, the objective of this policy is to create an open market for the provision of facilities and services and conditions in Anguilla’s telecommunications sector in support of the continued development of tourism, financial services and information-based services on the island.

As a consequence of the Telecommunications Act there has been increased competition in the telecommunications industry, a dramatic reduction in rates as a consequence and an increase in affordable bandwidth.

Legislative changes

The substantive offshore legislation enacted in Anguilla continues to be amended and The International Business Companies Act now includes the following provisions among others:

An IBC may not hold real property situated in Anguilla, except an office for operating its business;
An IBC may use the name of a company which has been struck off the register for over three years;
An IBC may issue various types of shares and other securities, subject to its articles or by-laws;
An IBC may have an authorised capital in any currency approved by the Registrar;
Provisions covering the definitions and consequences of an IBC making unlawful distributions;
An IBC may create a priority on a mortgage or charge by registering same at the Companies Registry;
Provisions covering consequences and actions required of an IBC when a registered agent ceases to act on its behalf;
An IBC may have only one director, together with provisions for meetings and resolutions of the company, where only one director exists;
Provisions regarding proper accounting records.

At the same time, the Companies Act has been amended to include the following:

Provisions clarifying the requirement for shareholder meetings, and the requirement for companies to keep proper accounting records;
Provisions covering the consequences and actions required of a Company when a registered agent ceases to act on its behalf;
Provisions clarifying the requirements for annual returns;
The inclusion of detailed new merger and consolidation provisions;
Provisions covering the revival of a company by both the registrar and the court;
The inclusion of detailed enforcement measures and other protective actions by members of a company;
Regulations amending registration and filing fees by creating a reduced scale of fees for documents filed electronically using the ACORN system.

New legislation

The Anguilla Insurance Act 2004 was enacted by the Legislative Assembly in September 2004. It provides up-to-date insurance legislation including flexible provision for captive insurance and wide scope for both domestic and foreign business.

The Anguilla Mutual Fund Act 2004 was enacted by the Legislative Assembly in August 2004. It provides for a reasonable regulatory framework for the management and administration of mutual funds.

The Protected Cell Companies Act 2004 was enacted by the Legislative Assembly in August 2004. It provides flexible provisions for new and existing companies
in the insurance industry or for other purposes.

Anguilla has demonstrated its desire and commitment to be among the number of well-regulated jurisdictions. It intends to adhere to the highest standards of regulation and quality and believes that its reputation in this respect will continue to enable it to attract quality business without unduly compromising the privacy of its clientele.