by Linda Straker
- 4 pieces of legislation will be repealed as of December 2021
- European Union in 2017 described these legislations as “harmful tax practices”
- Offshore banking was a sector to grow and develop economy during mid-1990s
The Grenada Authority for the Regulation of Financial Institutions (GARFIN) will be losing thousands in revenue by 31 December 2021 because international business companies that pay fees under the international financial laws must dissolve and wind-up operations.
The repeal of 4 pieces of legislation takes effect in December 2021:
- International Companies Act
- International Insurance Act
- International Trusts Act
- Offshore Baning Act
These were approved during the mid-1990s when Grenada embarked on making offshore banking one of the sectors to grow and develop the economy.
The European Union in 2017 described these legislations as “harmful tax practices” and members of both the Lower and Upper Houses of Parliament in December 2018 approved for them to be abolished from the list of active legislations on 31 December 2021.
A review of the GARFIN 2019 annual report which was recently tabled in the Lower House shows that international business services/registered agents brought an income of EC$71,650 in 2019. In that same year, the income from international betting fees was EC$96,162.
At the time of approving the legislation, there were 84 international business companies registered with GARFIN. The 2019 report shows a small reduction of such companies registered at the Authority. “As of December 31, 2019, there were 74 companies registered under the International Companies Act Cap 152 with 62 of these companies in good standing, while 12 were being pursued for weak compliance,” the report stated.
Of the 74 registered companies, 2 have been granted licences under the International Betting Act. “There are no companies licenced under the Offshore Banking Act, the International Trust Act, the International Insurance Act or the Offshore Banking, the International Trusts Act, the International Insurance Act or the Company Management Act.” The report disclosed that one of the international betting companies already completed its process of dissolution.
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