But there's a new group of visitors to the island, looking for sun, sand, and a favorable income tax rate. "Some of my friends just got back from Anguilla," says Raymond Zhu, who owns a manufacturing plant and is mulling setting up an offshore unit to better deal with exports. "They suggested I consider setting up on the island due to the zero tax policy and stable environment.
The Hollywood a-list and the Chinese entrepreneurs have more in common than you would guess at first glance. Anguilla has one of the most attractive tax regimes in the world: domestic and overseas commercial companies don't need to pay business tax, dividend tax, capital-gain tax or other directly imposed taxes. Individuals also don't need to pay donation tax or inheritance tax. The primary source of money for the island is a consumption tax readily paid by some of the least cost conscious tourists in the world.
It was also a hiccup in the country's tourism industry that spawned the all out drive to forge out the island's place among financial centers.
Any way the wind blows Anguilla's tourism industry is more than just a few beach side hotels. Winter homes and villas for persons of high net worth have been built across the tiny 3x16 mile island, and construction of homes and resorts is the other main contributor the GDP, with agriculture and fishing taking a distant second and third.
Then in 1995 hurricane Luis shut down the tourism sector, and thus the island's economy, for a year, close on its heels came hurricane Lenny in 2000, driving home the point that the island needed a second prong to its development strategy. So Anguilla, like many islands before it, looked to financial services.
The Anguillan government passed a raft of laws regulating the island's financial sector and providing incentives for people to park their money on the island, including the Proceeds of Criminal Conduct Act, The Money Laundering Reporting Authority Act, the Company Management Act, the Trust Companies and Offshore Banking Act, the International Business Companies Act, the Limited Liability Company Act and the Limited Partnership Act. These measures, all passed in the year 2000, created one of the most liberal taxation regimes on the planet.
Cheap and Reasonable Besides the country's assortment of zero tax policies, Anguilla does not distinguish between local and overseas offshore companies, and trusts established based on Anguilla laws are also entitled to zero rate policy. Public disclosures and declaration are rarely required, and companies don't need to submit annual financial reports or conduct annual auditing.
"In Anguilla, no tax shall be declarable or payable while privacy protection is provided, and it's not required to disclose information concerning shareholders and directors," said Annie Li, an account manager with Conpak CPA Limited. "So setting up an Anguilla company is a good choice." In addition, there are no foreign exchange restrictions in Anguilla. The territory's government grants multi-year work permits for professionals within the financial services industry.
The work has paid off. Thanks to its stable political and economic situations as well as a sound supervisory system on the country's financial services sector, many international companies including big-sized accounting firms and banks have already established offices in Anguilla in the past few years.
The island's relationship with China, both on a government-to-government level and a person to person level, has been a focus of attention. Anguilla's tourist industry has attracted laborers from China. The government also has special services for Chinese businessmen, including the ability to incorporate under a Chinese language name.
Ease of access The fact that Anguilla is not yet on the radar screen for most businessmen (or Paparazzi), offers advantages as well. The big one being that the island is a considerably cheaper place to get established in than the more pricey nearby islands like Bermuda. People who have already incorporated locally report that the island has a modern computerized registry that allows for quick set up with little hassle, and with the extra attention that comes with going to a boutique venue. Incorporation should be done the same day.
The island also boasts a world-class telecommunications system, needed to keep the glitterati in touch with those back on the mainland. Anguilla has direct daily flights to and from Puerto Rico via American Eagle. Two other gateways are St. Martin and Antigua, both of which have international flights to Europe and North America. Express deliveries through international courier services are well established. Of course you don't have to even be present to have an Anguillan business. You just need one shareholder and director and a local person or company to act as an agent.
Of course being among the best beaches and climate in the Caribbean it's hard to imagine anyone wouldn't want to visit. Perhaps Raymond Zhu will find his ideal offshore destination and catch a glimpse of his favorite celebrity all on the same trip.