Our last stop for this year’s journey across offshore jurisdictions and tax havens will be Antigua and Barbuda.
Sometimes considered a David to the Goliath that is the US over its WTO and online gambling spat, this jurisdiction holds a special place to many. Good or bad.
While not exactly a reputable jurisdiction, Antigua and Barbuda is often seen as tolerated, a distinction that puts it above many otherwise comparable jurisdictions.
Gambling, Antigua, the US, and the WTO
Much has been written about this topic over the years.
In short, Antigua and Barbuda was benefiting greatly from American gamblers on online poker rooms, sports betting websites, and casinos licensed and (minimally) taxed in Antigua. Antigua was one of the first jurisdictions in the world to create a regulatory framework for online gambling.
Then came UIGEA, the Unlawful Internet Gambling Enforcement Act, in 2006, added as Title VIII of the SAFE Port Act, a set of laws in the US that outlawed online gambling. Casinos worldwide plummeted as revenues from American players vanished.
Some found underhanded ways to keep American, while Antigua decided to pick a fight with Goliath.
Antigua took to the WTO (World Trade Organization) and claimed that the US was violating the GATS (General Agreement on Trades and Services), claiming an astronomical 3.5 billion USD in penalties. In December 2007, the WTO found in favour of Antigua but only awarded it 21 million USD.
The decision from WTO also empowered Antigua to disregard intellectual property rights of US rights holders without repercussions from WTO and WIPO. While other treaties complicate matters, it essentially means Antigua and Barbuda does not need to answer to copyright claims from the US up to the tune of 21 million USD per year.
Some claim this to mean that Antigua and Barbuda has no copyright laws. This is false. It also doesn’t mean that Antigua and Barbuda is completely lawless when it comes to US intellectual property rights.
Counterintuitively perhaps, the US and Antigua and Barbuda have strong relations. The gambling and WTO spat has not destroyed the two nations’ relations. The US provides financial aid to Antigua and Barbuda and helps combat drug trafficking.
- The Antigua- US WTO Dispute over Internet Gambling
- United States — Measures Affecting the Cross-Border Supply of Gambling and Betting Services
- The Antigua-United States Online Gambling Dispute
Geography and Demography
|Full Name:||Antigua and Barbuda|
|Other major languages:||Antiguan Creole|
|Type of government:||Parliamentary democracy|
|Legal system:||Common law (English model)|
|GDP per capita:||20,000 USD|
|Currency:||East Caribbean Dollar (XCD), pegged at 1 USD = 2.7 XCD|
Incorporation and Business
As mentioned already, the reputation of Antigua and Barbuda is hard to define.
Don’t get me wrong, though. It’s generally bad. The question is how bad and what kind of bad.
The Seychelles for example have bad reputations for tax evasion as well as money laundering, whereas for example Mauritius is a a notorious tax haven but not seen as problematic in terms of money laundering or excessive secrecy.
Antigua and Barbuda has some deficiencies in its EOI (Exchange of Information) legislation, bookkeeping records, and ownership records. However, none egregious enough to garner much international criticism or outrage.
Antigua and Barbuda is not a top contender in popularity and offers no distinct advantages over most IBC jurisdictions.
Owing to limited competition, incorporation fees are relatively high. Many service providers do not have websites and instead only take on through intermediaries. Some may respond to email or even pick up the phone, if you try to reach out.
Companies are often formed for other purposes than traditional business and holding. A common usage of Antiguan IBCs is vessel registration, mostly yachts but also large freight ships. Antigua and Barbuda is one of the largest flag of convenience jurisdiction. Although the gap up to the world-leader Panama is enormous, Antigua compares in size to Liberia, Marshall Islands, The Bahamas, and Malta.
Antigua and Barbuda is a few-questions-asked kind of jurisdiction which puts a lot of emphasis on not rocking the boat. The government makes a good amount of money every year on the corporate services sector.
The offshore financial services sector in Antigua and Barbuda is primarily the responsibility of the Financial Services Regulatory Commission (FSRC).
International Business Company (IBC)
IBCs are formed under the International Business Companies Act, enacted first in 1982 but which underwent significant revisions in the late 1990s.
Requirements are simple:
- One director required. Corporate directors permitted.
- One shareholder required. Corporate shareholders permitted.
- No paid up share capital required.
- Registered address in Antigua and Barbuda required.
- Bearer shares are permitted but must be deposited with a custodian.
IBCs are guaranteed to be exempt from taxation for 50 years.
Company name disclosed to authorities, which can be searched by contacting the FSRC. You usually need to show up in person, so if you are curious about the status of an Antiguan IBC, it’s better to ask for a certified copy of the corporate documents.
Or take a two-week vacation and expect to waste two to three business days dealing with the FSRC, if there’s anyone around to handle your inquiry.
Antigua and Barbuda International Trust
There isn’t a whole lot to say about Antigua and Barbuda as a trust jurisdiction. It’s again not a major player, outside of maritime services.
Trusts are formed under an International Trusts Law which was passed in 2007.
The legislation is as ironclad as you could expect. Short of local court orders, which are hard to come by, practically nothing penetrates an Antiguan trust.
Trusts are not perpetual but the maximum duration is 200 years, which should be plenty for most trusts.
Fraudulent conveyance is limited to one year.
Antigua and Barbuda Gaming License
Under the relatively watchful eyes of the Directorate of Offshore Gaming, has a reasonably reputable igaming sector.
Fees are low and getting a license is not particularly difficult.
The requirements and ease of getting a license are similar to for example Curaçao. The big difference is that Antigua is whitelisted by the UK and operators licensed there are allowed to market in the UK, whereas for operators licensed in Curaçao and unlicensed in Costa Rica cannot.
The FSRC maintains a list of all service providers. As of writing, it was most recently updated in October 2011.
Antigua and Barbuda is not different from most of its Caribbean peers. Banking is expensive and relatively poor in terms of service quality and sophistication.
Antigua and Barbuda Banking License
Antigua and Barbuda is known for its very easy-going banking license regime.
There are three classes of international banking licenses issued by the FSRC.
Class I needs a minimum of three million USD in capital, although 500,000 USD needs to be set aside for an investment in the FSRC. This is what most people think of when they imagine banking. A Class I bank can do everything a normal bank can, except for engage with local residents or the local currency, thereby creating a completely separate financial system that the local government cares practically nothing about (which includes you as a depositor and your rights).
Class II is a restricted license, requiring only 500,000 USD in capital (of which 100,000 USD be invested in the FSRC). These banks may only transact with pre-described customers. This is often used for captive banking or very specific-purpose banking needs.
Lastly, there is Class III. This license category is similar to Class I but also includes a trust license. The capital requirements are the same as Class I.
Setting up a bank in Antigua and Barbuda is very simple. You just need two resident senior staff members of which one must be a full-time employee and at least one must have experience in finance or banking, an office space that must be open for six hours every day between Monday and Friday (except for holidays – and except for all those days that no one actually checks), and a couple of laptops to fully satisfy the FSRC.
Accounting records can be kept overseas but need to be sent to Antigua once a month.
Of course, there is a lot more involved in order to actually make a bank functional.
Opening a bank account in Antigua and Barbuda is pretty straight forward. Practically every bank permits remote account opening, although an intermediary may be required in some cases.
Minimum deposits are usually around 2,000 – 10,000 USD.
While it is similar to other IBA jurisdictions in that secrecy is stronger in theory than the local culture. However, Antigua and Barbuda is a relatively old jurisdiction and has stood its ground on a number of cases to prevent fishing expedition.
Antiguan authorities are empowered to compel banks to disclose information without a court order, and share this information with foreign authorities.
Banks in Antigua and Barbuda
There are twelve Class I or Class III in Antigua and Barbuda:
- Antigua Overseas Bank (In Receivership)
- BOI Bank Corporation
- BRS Banque
- CBA Bank and Trust
- D Bank (Formerly Davos International Bank)
- Global Bank of Commerce
- International Investment Bank
- Meinl Bank
- North International Bank
- PKB Privatbank
- Trium Bank and Trust
- Unicorp Bank Overseas
Older lists can be found circulating the internet, including several banks which have been forcibly shut down under more or less controversial circumstances. Three notable cases are Stanford International Bank, Antigua Overseas Bank, and Barrington Bank.
Living in Antigua and Barbuda
Antigua and Barbuda is a beautiful group of islands. It is no surprise why these islands are so popular with tourists.
Long-term living is relatively comfortable. Antigua and Barbuda is one of the wealthiest nations per capita in the region and following fiscal reforms in the early 2000s the nation’s debt-to-GDP ratio sank from over 130% to under 90%. The island is however highly dependent on tourism and the 2009-2011 global financial hardships hit the tiny island nation quite hard. It would no doubt have been much worse had the island been in its rough early-2000s shape but it still has not fully recovered.
Nonetheless, Antigua and Barbuda is politically stable and enjoys one of the highest standard of living in the Caribbean.
There is no capital gains tax on residence but there is an income tax starting at 10% and going up to 25%.
The corporate tax for a local company is 25%.
There are talks about changing to a territorial taxation system.
Aside from the usual work permit route (which is difficult), residence can be obtained buy investing in property in Antigua. This programme is rather expensive, costing at least 20,000 USD per year. You need a very high income or very large wealth to make 20,000 USD worth your while.
Henley & Partners, the masterminds behind many citizenship by investment programmes, have helped Antigua and Barbuda establish such a programme, the Citizenship by Investment Program. For a cool 250,000 USD (temporarily discounted to 200,000 USD), a property investment of 400,000 USD, or an investment in a local business of 1.5 million USD (plus various administrative fees or other fees), one can obtain an Antigua and Barbudian passport.
The passport is good for visa-free or visa-upon-arrival in over 133 countries and jurisdictions, placing it ahead of both Dominica and Saint Kitts and Nevis, which both have similar (but far more well-established) programmes.
Antigua and Barbuda is a jurisdiction everyone knows of but few actually take the time to fully appreciate.
The jurisdiction is very gambling friendly, making a popular jurisdiction not only for licensed offshore gambling operators for some gambling affiliates.
Incorporation is pretty standard but costs rarely make it a better option than many other IBC jurisdictions, more secretive or more reputable alike.
Living in Antigua and Barbuda is fantastic and for those with the financial means, acquiring citizenship can be a worthwhile investment.