ANGUILLA

BRITISH WEST INDIES








A UNIQUE


OFFSHORE FINANCE

AND

BUSINESS CENTRE














ANGUILLA OFFSHORE FINANCE CENTRE

WHY CHOOSE ANGUILLA AS YOUR OFFSHORE FINANCE CENTRE?


! British Dependent Territory
! Zero tax jurisdiction
! No foreign exchange restrictions
! Well regulated financial services
! Common law legal system based on English law
! Well developed professional infrastructure
! State of the art telecommunications system
! Easy air access to North America and Europe
! Same day incorporation service
! Confidentiality and banking secrecy legislation
! Multi year work permits available for professionals within the financial services industry


On 1st January 1995 a comprehensive package of new financial services legislation came into force in Anguilla. The package comprised:

! the International Business Companies Ordinance;
! the Limited Liability Companies Ordinance;
! the Limited Partnership Ordinance;
! the Trusts Ordinance;
! the Partnership Ordinance;
! the Fraudulent Dispositions Ordinance;
! the Companies Ordinance; and
! the Company Management Ordinance.

With the enactment of this legislation, Anguilla rapidly re-entered the international financial services arena.


LOCATION

Anguilla is located in the Eastern Caribbean, east of Puerto Rico and the Virgin Islands. It is only a few minutes by air from the major international airport of St. Maarten and is serviced by regular flights from the other international Caribbean gateways of Antigua and Puerto Rico. Anguilla's location, and its reputation as a friendly and virtually crime free society, has enabled it to establish itself as a high end tourist destination.


STATUS, LEGAL SYSTEM AND INFRASTRUCTURE

Anguilla is one of the five remaining British Dependent Territories in the Caribbean and as such it enjoys a high degree of political stability. All political parties are strongly committed to the growth of Anguilla as a quality financial services centre.

Although the country is essentially self governing, its legislature being the democratically elected House of Assembly, the Constitution gives the British appointed Governor certain fundamental reserve powers. All legislation must be assented to by the Governor as the Queen's representative.

Anguilla is a common law jurisdiction. Its judicial system is administered by the Eastern Caribbean Supreme Court, the appeal process culminating with the Privy Council. The Court system is serviced by a number of firms of fully qualified and experienced lawyers.

Banking services are provided by Barclays Bank and Bank of Nova Scotia, as well as by the National Bank of Anguilla and the Caribbean Commercial Bank which are both indigenous banks. The professional infrastructure is well developed, with major accounting firms represented on the island. The telecommunications system is state of the art, providing direct access worldwide.


TAXATION AND EXCHANGE CONTROL

Unlike many financial services centres, Anguilla is truly a zero 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 program allowing for multi year work permits of up to four years duration and relaxed residency rules.

There are no exchange controls in Anguilla. Although the official currency is the Eastern Caribbean Dollar, the United States Dollar is commonly used.


CORPORATE VEHICLES AVAILABLE

Anguilla has three types of company:

1. The International Business Company is based on the traditional model and provides for the easy incorporation and subsequent administration of a flexible and cost effective corporation.

Companies incorporated in any other jurisdiction may be continued in Anguilla as an IBC. An Anguilla IBC can, where the laws of another jurisdiction permit, redomicile to such jurisdiction.


2. The Limited Liability Company. Anguilla is one of the few jurisdictions to have an Act or Ordinance dealing specifically with limited liability companies. Although the LLC Ordinance has its roots in the original Wyoming legislation, Anguilla LLCs have developed the concept much further.

An Anguilla LLC can readily be structured so that it possesses less than three of the four corporate characteristics recognised by the US Internal Revenue Service, namely (a) continuity of life, (b) limited liability, (c) centralised management and (d) free transferability of interests. In such case the LLC will be treated as a partnership. Properly structured, therefore, an Anguilla IBC will provide its members with limited liability, but provide the advantages of income and losses passing through to the members.

The Anguilla LLC Ordinance has many features not found in the original Wyoming legislation, including a provision that its term can be perpetual or as otherwise provided for in the LLC agreement.


3. The normal company, which can be used both within Anguilla and as an offshore vehicle, is governed by the new Companies Ordinance. The Ordinance contains many attractive features:

! Companies may be incorporated by one incorporator and have one director.
! Companies may be limited by shares, by guarantee or by both shares and guarantee.
! The Ordinance abolishes the doctrine of ultra vires.
! Companies may acquire, purchase or own their own shares.
! Filing formalities have been streamlined.
! Companies may continue in or out of Anguilla.
! A special class of Specific Private Companies that are exempted from some record keeping and accounting requirements.

Companies must be incorporated through a local agent all of whom, from 1 July 1995, will have to be licensed under the new Company Management Ordinance and regulated by the Inspector of Company Managers. The Government and private sector are working closely together to establish best practice guidelines for company managers. These will be designed to ensure that through the application of due diligence procedures and the adoption of high standards of practice, Anguilla attracts the best business and that its reputation is maintained.

The relevant IBC, LLC, Limited Partnership and Trust Ordinances all provide a statutory exemption from all forms of corporate, income withholding or other like taxes in respect of offshore business.

Companies are usually formed within 24 hours of the application being lodged.


TRUSTS

The new Trusts Act is the culmination of an exhaustive study of the trusts legislation of many other jurisdictions. The decision was taken to repeal the existing trusts legislation and replace it with a completely new Ordinance, rather than attempt to amend it.

The Trusts Ordinance, which has its roots in English trust law, provides a framework so flexible that the only limitation to its use is the imagination of the trust practitioner. Specifically, the Ordinance permits commercial or charitable purpose trusts, unit trusts, spendthrift trusts, asset protection trusts and what are termed variant trusts. The provision for variant trusts permits a settlor to create a trust (in whatever form and by whatever name) of a type recognised by the law or rules of his religion or nationality or which is customarily used by his community.

The Ordinance provides for a protector of the trust (who may be the trustee). The protector may be provided with the power to remove the trustee and to appoint new or additional trustees.

The Rule against perpetuities has been abolished and accumulation of income throughout the full term of a trust is possible.

The Fraudulent Dispositions Ordinance provides that a fraudulent disposition is voidable by a creditor provided that the settlor was insolvent at the time of the disposition or became so as a result thereof and provided that the creditor commences his action within three years of the date that the assets were settled into trust. The burden of proving that the settlor was or became insolvent as a result of the transfer is on the creditor.

In relation to asset (or creditor) protection trusts, therefore, Anguilla has deliberately taken a more conservative approach than some jurisdictions.

Where a trust is created under the laws of Anguilla, the Court shall not vary it, set it aside or recognise the validity of any claim against the trust property pursuant to the law of another jurisdiction or the Order of another Court in respect of:

- marriage or its termination;
- succession rights;
- the claims of creditors in an insolvency;
- the imposition of any foreign tax or duty.

Other characteristics of an Anguilla trust include choice of governing law and flight provisions.


PARTNERSHIP AND LIMITED PARTNERSHIP

The Limited Partnership Ordinance provides an attractive investment vehicle, particularly for the raising of venture capital, permitting the limited partners to be insulated from liability.


BANKING

The Government of Anguilla has taken a conscious decision to establish the island as a well regulated financial services centre attracting only quality business. There are no "brass plate" banks, and none will be accepted. Generally, only banks which are subsidiaries or branches of banks with an established track record which are subject to the effective consolidated supervision of their home authority will be licensed as offshore banks in Anguilla.


CONFIDENTIALITY

The need for confidentiality in a financial services centre is understood and Anguilla has, since 1981, had a Confidential Relationships Ordinance which imposes severe penalties on any person wrongly disclosing confidential information.

Anguilla does have a Mutual Legal Assistance Treaty with the United States, but this does not extend to any fiscal matters. Anguilla is a member of the Caribbean Financial Action Task Force.


FUTURE LEGISLATION

Work on completely new insurance legislation is underway, and a new Offshore Insurance Ordinance is expected to be enacted before the end of the year. This will be completely up to date and is expected to make Anguilla a very attractive jurisdiction for insurance captives. Amendments to the Offshore Banks and Trust Companies Ordinance are also expected to be enacted this year.

A fully computerized Companies Registry allowing for instantaneous company formation on a 24 hours basis is expected to be put in place by the end of 1995. The on-line services will be available to local and overseas agents.

FEES (IN US DOLLARS)

IBC's

Incorporation, capital $50,000 or less
(or no par value shares) $ 250
Incorporation, capital in excess of $50,000 $1,000
Annual Return fees $ 200­$700



Companies

Incorporation Fees $ 335-$500
Annual Fees $ 280

Limited Liability Companies

Formation $ 250
Annual Fee $ 250

Limited Partnerships

Formation $ 250
Annual Fee $ 250


Company Managers

Application Fee $ 500
Initial Licence Fee $2,000
Annual Fee $2,000

Trusts

Registration (optional) $ 250


INSURANCE COMPANIES

Both domestic and offshore insurance companies are governed by the Insurance Act (No. 14 of 1968) and the Insurance Regulations (SRO 21 of 1970). New domestic and offshore Insurance legislation is now under consideration.

Insurance business is divided by the Act into three classes.

(a) Marine Insurance
(b) Life Insurance
(c) Non­Marine Insurance (includes all other
forms of insurance business).




FEES (IN US DOLLARS)

Application Fees ­ $186 for each class of insurance in which the insurer applies to be registered.

Incorporation Fees ­ $335 (minimum paid up capital of US$75,000)

Annual Fees ­ For an insurer maintaining a physical presence in Anguilla:
$186 marine insurance;
$746 any other class of insurance.

For any other insurer:

$373 for Marine Insurance;
$1,866 for any other class of insurance.


OFFSHORE BANKS AND TRUST COMPANIES

The Offshore Banks and Trust Companies Ordinance (1991) and Regulations (1992) govern the licensing and regulation of all offshore banks and trusts.

The day to day regulation of offshore banks and trust companies is carried out by the Superintendent of Offshore Finance who is answerable to the Governor. All applications for licences are thoroughly screened and, if approved, a licence may be subject to specified conditions or limitations.


TYPES OF LICENCE: ­ OFFSHORE BANKS

Unrestricted Class I Licence

Restricted Class II Licence

Permits the carrying on of banking business with persons or companies resident outside Anguilla, but including Anguillian companies who do not generate revenue in Anguilla.

Restricted Class III Licence

Permits the carrying on of banking business with specifically named persons or companies.


TYPES OF LICENCE: ­ OFFSHORE TRUST COMPANIES

General Trust Licence

Permits carrying on trust business with all trusts created by a Settlor or Grantor who is not a resident of Anguilla.

Restricted Trust Licence

Permits carrying on trust business with specifically named persons resident outside Anguilla.


FEES (IN US DOLLARS)

Application Fees (non­refundable)

Unrestricted Class I Banking Licence ....................................$1,860
Restricted Class II Banking Licence ..................................... $9,300
Restricted Class III Banking Licence .................................... $7,440
General Trust Licence ..................................................... $9,300
Restricted Trust Licence ................................................... $1,860


Annual Licence Fees

Unrestricted Class I Banking Licence ................................... $3,720
Restricted Class II Banking Licence .................................... $18,600
Restricted Class III Banking Licence ................................... $11,160
General Trust Licence ..................................................... $18,600
Restricted Trust Licence .................................................. $7,440


Incorporation Fees

Offshore Bank ­ (minimum paid up
capital $373,000.00) ...................................................... $ 335

General Trust Company .................................................. $ 335


Government Offices

Regulation of Offshore Financial Services
Superintendent of Offshore Finance: Mr Richard Carpenter
Deputy Superintendent: Mr Alex Richardson
P O Box 60
The Valley
Anguilla
Tel (809) 497­5881/2451
Fax (809) 497­5872

Registrar of Companies, International Business Companies, Trade Marks & Patents
Mr Joseph Brice
P O Box 60
The Valley,
Anguilla
Tel (809) 497­3881/2451
Fax (809) 497­5872

Promotion and Marketing
Offshore Finance Promotions Agency
P O Box 60
The Valley
Anguilla
Tel (809) 497­5881/3881
Fax (809) 497­5872

Investment in Anguilla
Economic Planning Unit
Mr Carl D Harrigan
Ministry of Finance
The Valley
Anguilla
Tel (809) 497 3635
Fax (809) 497 5872

Work Permits and Residency
P.S. Home Affairs
The Secretariat
The Valley
Anguilla
Tel (809) 497 2451
Fax (809) 497 3389

Alien Landholding Licenses
P.S. Lands
Mr Allister Richardson
The Secretariat
The Valley, Anguilla
Tel (809) 497 2443/2451
Fax (809) 497 3389