INTRODUCTION
A Palette from which the Investor can Paint His Own Picture
The Bahamas hosts the sixth-largest branch of the Society of Trust and Estate Practitioners (STEP) in the world and is home to a range of professional investment-management services of the kind that one can find in New York, London and/or Hong Kong. In this, the first mini-report in the year's series, we look at the difference between wealth management and wealth planning, the latter being essential to any high-net-worth (HNW) family that wants to beat the odds and preserve its wealth into the third generation.
As we do so, we unpack the "Bahamas Toolkit," the comprehensive range of private wealth-management options to be found in the jurisdiction.
This includes: the ICON fund structure, aimed at the Brazilian market; the Bahamas Executive Entity or BEE, which can provide a trust with resolute organisation and governance that stems from a central point and lasts for generations; private trusts; the commonly-used purpose trust - a structure which has no beneficiaries and can hold the shares of private-trust companies and other legal entities (a function that the BEE often fulfils also); and SMART Funds, which capitalise on the jurisdiction's renowned expertise with purpose trusts and help investors to act in line with their objectives and risk limits.
Meanwhile, under the Digital Assets and Registered Exchanges (DARE) Act 2020, The Bahamas is poised to become an important jurisdiction for small and flexible foreign firms that want to do digital-asset business all over the world from a well-regulated base that is not located in a large, densely packed jurisdiction such as the United States, the United Kingdom, Japan, Canada or one of the countries of the European Union. It remains a magnet for people who want to set up family offices.
We also observe the political stability of The Bahamas, which helps governments of different complexions to build upon each others' achievements rather than change policy constantly. In 2018, for example, the Government established a new Policy Framework for the Public-Private Partnership Initiative, intending to create a formal and transparent method for improving, updating or creating public assets with private management and at the same time using public and/or private capital. The bold Nassau Cruise Port bond offering in 2020 was the first major result. After a general election in 2021, the new governing party wisely continued that policy.
Lastly, environmental initiatives provide some of the clearest evidence of The Bahamas's resilience and flexibility. The Carbon Credits Initiatives Act has put The Bahamas at the forefront of the global carbon-finance movement, as further reading will show.
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