Montserrat Companies and Montserrat Trusts

General Introductory and Offshore Tax Information

Montserrat is a budding tax haven that has passed numerous Acts in view of strengthening its financial services sector. These Acts comprise laws for offshore companies and entities which provide leverage for attracting an international market as well as laws regulating the domestic financial sector.

Offshore companies and entities that can be incorporated in Montserrat are international business companies, offshore banks, offshore trusts and insurance companies. Enactments for a more diverse financial market came with the Mutual Fund Act in 2007 which allows for investors to compliment capital with offshore investments. In so doing however, regulatory measures were put in place so as to avoid and eliminate the incidence of financial ills such as terrorism and laundering. Acts passed to achieve this end include the Criminal Justice (International Co-operation) Act, Anti-Money laundering Regulations, Proceeds of crime Act and Mutual Legal Assistance Criminal Matters (USA).

The Commission (Financial Services Commission) requires for most entities to be regulated and licenced. International offshore banks, mutual fund operators and administrators, insurance companies, trust companies and company management companies, for instance, are to apply for business licenses in order to operate. Application forms are prescribed and must be accompanied by a personal questionnaire and business plan.

Montserrat offshore companies are exempted from tax: income tax, tax on dividends and interests, withholding tax, capital gains tax and estate duty. No exchange controls are imposed on any Montserrat offshore company. Montserrat offshore companies are incorporated by the Commission.

Montserrat Offshore Business Entities:

• Montserrat International Business Company
• Montserrat Offshore Trust
• Montserrat Offshore Insurance
• Montserrat Offshore Captive Insurance
• Montserrat Offshore Banking

Montserrat International Business Company

Main Features:

• Under the IBC Act, an Montserrat international business company is a an offshore entity that undertakes all of its business activities outside Montserrat
• The directors of an IBC do not have to be resident in Montserrat
• By law, there must be a minimum of one Director and one Shareholder
• The documents of an Montserrat international business company filed at Registrar’s office are not disclosed to the public
• The IBC Act stipulates that IBCs incorporated in Montserrat must have a registered office and a registered agent
• An IBC may do its accounting in a foreign currency depending on the countries in which business is conducted
• Montserratian IBCs may issue shares at no-par value
• The members of an IBC are required to keep meetings from time to time
• There is no obligation placed on an IBC to file audited accounts

Montserrat Offshore Trust

Main Features:

• International trust business is governed by the International Banking and Trust Companies Act
• Montserrat international trust companies must meet the minimum capital requirement of USD 250,000

Types of Montserrat Offshore Trusts:

General Offshore Trust Company

• A Montserrat offshore trust company to which a general trust company licence was issued
• A Montserrat offshore company cannot hold a licence for general trust

Restricted Offshore Trust Company

• A Montserrat offshore trust company to which a restricted trust company licence was issued
• A restricted offshore trust company can only carry out trust business with the people and classes of people that it requests from the commission, providing that these people or classes of people are contrary to the list of people and classes of people approved by the commission.

Montserrat Offshore Insurance

Main Features:

• Montserrat offshore companies are regulated by the Insurance Act 2001
• The charge of administering the Act is placed with the Supervisor of Insurance
• All Montserrat offshore insurance companies must satisfy all statutory deposit requirements
• Minimum capital requirements must be maintained throughout the life of the offshore insurance company
• A resident in Montserrat must be appointed as local agent or representative
• All insurance business must be in the interest of the public
• Montserrat offshore insurance companies must remain solvent at all times
• Any business undertaken in Montserrat, prudential reports and audited financial statements must be reported to the Supervisor of Insurance annually
• All directors and officers must be physically and mentally fit

Montserrat Offshore Captive Insurance

Main Features:

• Legislation for forming offshore captive insurance companies in Montserrat is underway
• The legislation is expected to enable the formation of protected cell and segregated companies which will offer international clients with a wider range of offshore companies and entities to choose from

Montserrat Offshore Banking

Main Features:

• International offshore banking in Montserrat is regulated by the International Banking and Trust Companies Act
• Montserrat offshore banking is banking business conducted in or from within Montserrat with non residents of Montserrat and in foreign currency
• Offshore banks must maintain a reserve as required under the Act
• A capital of at least USD 1 million must be issued
• A Montserrat offshore bank can only be a branch or subsidiary of a bank which is well established and clean track record, or a bank which does not have to be a subsidiary but is tightly related to an overseas bank and falls under the supervisory framework of its bank affiliate or, is a subsidiary which is completely owned by an acceptable non bank corporation with shares which are quoted on an established stock exchange. The aim of this subsidiary should be that of carrying out in-house treasury operations which are completely consolidated within the financial statements published by the parent company
• The auditing procedures for potential offshore banking licence holders must comply with IAAS standards.
• A Montserrat offshore bank is required to maintain its head office in Montserrat; a head office is kept outside Montserrat only if it is agreed that the supervisory authority in Montserrat provide information regarding the management of the bank. The Financial Services Commission must also be satisfied that the standards established by the Basle Committee on Banking Supervision are met and that the bank accepts for consolidated supervision to be carried out by the supervisory authority which is based in Montserrat