Introduction
Anguilla is a British overseas territory in the Caribbean, one of the most northerly of the Leeward Islands in the Lesser Antilles. It consists of the main island of Anguilla itself, approximately 26 km (16 miles) long by 5 km (3 miles) wide at its widest point, together with a number of much smaller islands and cays with no permanent population. The island’s capital is The Valley. The total land area of the territory is 102 km² (39.4 square miles), with a population of approximately 13,500 (2006 estimate).
Business Environment
Complementary to the fact that Anguilla is a high-class tourist market , the Government and the private sector jointly decided to follow a similar path for its international financial services industry. This has led to the development of a bespoke rather than off-the-peg, flexibly but well regulated, and, probably most importantly “clean” rather than “crooked”, offshore industry operating in Anguilla’s tax-free environment.
As international trade becomes globalised, the business community is presented with a bewildering number of choices as to the ideal jurisdiction in which to operate. Opting for a low or zero tax country is only one of many factors affecting today’s business decisions. Corporate situs is becoming competitively significant as trade barriers fall and facilities such as the Internet become readily available. Commodities such as intellectual property and data need no longer be maintained in jurisdictions with oppressive fiscal and regulatory regimes.
Economic Environment
The economy of Anguilla is expanding rapidly, especially the tourism sector which is driving major new developments in partnerships with multi-national companies. This boom, beginning gently during 2005-2006, is accelerating through 2007 and is expected to continue for years. In an effort to prevent overheating, there is currently a moratorium on “non-belongers” (foreigners) buying land in Anguilla.
Anguilla’s thin arid soil is largely unsuitable for agriculture, and the island has few land-based natural resources. Its main industries are tourism, offshore incorporation and management, offshore banking, and fishing. Many insurance and financial business are headquartered in Anguilla
Offshore Environment
The Anguillan government does not recognize any difference between local and offshore companies as all enjoy the zero-tax benefits. The more popular difference lies in the establishment of a Private Company and an International Business Company (IBC). A private company is a normal company but exempt from all reporting duties, i.e. auditing and publishing accounts. It cannot have more than 11 members, cannot offer shares through prospectus or an offer to the public; more like a private company in the UK. An IBC is rather inexpensive to form and has a very low disclosure requirement, that to the government and not to the public.
Taxation
Unlike many financial services centres, Anguilla is truly a neutral tax jurisdiction. There are no income, capital gains, estate, profit or other forms of direct taxation on either individuals or corporations, whether resident in Anguilla or not. This makes Anguilla a very attractive location for financial services professionals to base themselves. The Government recognises the desirability of expanding Anguilla’s professional infrastructure and has very recently established a new programme allowing for multi-year work permits of up to four years duration and relaxed residency rules.
Banking
Anguilla’s currency is the East Caribbean dollar, though the US dollar is also widely accepted. The exchange rate is fixed to the US dollar at US$1 = EC$2.68.
Banks in Anguilla are very strict where large amounts are being deposited or transacted by their clients. Evidence of the source of such funding must be produced to satisfy the investigation. Money laundering is discouraged in Anguilla by all financial institutions and professional advisers.
