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Alternative Market Briefing

The Bahamas emerges as a pandemic safe jurisdiction for family offices

Friday, August 07, 2020

As ultra high net worth investors rethink travel-heavy business models in the wake of covid, the Bahamas has become a popular base of operations, according to participants in the recent Opalesque Bahamas Roundtable. More investment firms and funds are choosing to domicile in the Bahamas as recent updates to financial regulations have streamlined the operations process.

In 2019, the Bahamas passed its Investment Funds Act which created a common compliance framework with FATCA, IOSCO, and also with the EU - while permitting that fund administration for Bahamas domiciled funds can take place anywhere in the world. Financial regulators in the Bahamas have also set up a fast track licensing operation for FinTech companies with the goal of being able to provide comprehensive financial services support.

"Having the structures, processes, people, products, and regulations in place that can serve larger pools of capital puts the Bahamas at the forefront as a financial center," said John Wilson QC, Senior Partner at McKinney Bancroft & Hughes. Wilson notes that these efforts also support the Bahamas economic permanent residency program. Economic residency programs have proven to be popular with investors and investment managers that want to create a base of operations in a financial hub.

The Bahamas also became a refuge during the initial onset of pandemic lockdowns. "The COVID-19 experience has also shown that our archipelago can offer a certain element of security as you can stay somewhat insulated from the possible ravages of international pandemics," said John Delaney QC, Senior Partner at Delaney Partners. The Bahamas investment in the financial sector has created a local skilled pool of human capital that was prepared to provide services without significant disruption to business operations. Indeed other lawyers in the Roundtable noted that more family offices have migrated to the Bahamas since the beginning of the year because of the combination of safety from the pandemic and the ability to quickly set up a new HQ.

Looking ahead, participants noted that a coming comprehensive review of the Bahama's tax system could provide new incentives for family offices and investment funds.

Read the full conversation in the Opalesque Bahamas Roundtable.

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