Asset protection in Dominica: a Caribbean Tax Haven

Asset protection
The Commonwealth of Dominica is a new entry to the offshore business, with the International Business Companies Act No. 10 being passed in 1996. It does however, have the excellent asset protection features of many of the more popular offshore centres.

IBC's incorporated in Dominica are completely free of all taxes for a period of 20 years. It is an independent sovereign jurisdiction and will not be affected by the impending EU/UK legislation.

The Act provides for total confidentiality with civil and criminal penalties for any disclosure of information. There is no requirement for the disclosure of the beneficial owner to any authority and bearer shares are allowed. There is no requirement to file audited accounts with the authorities.

While Dominica does have a Tax Information Exchange Act of 1988, this does not apply to offshore companies (IBC's).

Offshore legislation
The International Business Companies Act was enacted in June 1996 and provides for the incorporation, operation and regulation of International Business Companies (IBC's).

The advantages of incorporating in the Commonwealth of Dominica include the following:

  • There is exemption from all local taxes, duties and other similar charges for a period of 20 years.
  • There are no exchange controls on the movement of funds by IBC's and there is unrestricted operation of bank accounts.
  • Bearer shares are allowed and there is strict confidentiality. There is no requirement to file organizational or accounting information with any authority; and share registers are available for inspection only by registered shareholders.
  • There is no capital gains tax.
  • Members may reissue and reacquire their own shares and single directors and shareholders are allowed. Directors may be persons or another company.
  • Shareholder's and directors' meetings can be held outside Dominica.
  • There is no statutory requirement to hold an Annual General Meeting. If one is held, the time and place are determined by the members and the meeting may be by telephone or other electronic means.
  • Asset security is maintained as provisions restrict seizure, expropriation or confiscation by foreign authorities.
  • There are no minimum capital requirements.

General Information On The Commonwealth Of Dominica.
The Commonwealth of Dominica is a ruggedly beautiful English speaking country located in the Eastern Caribbean, between the French islands of Martinique and Guadeloupe. (It is sometimes confused with the Dominican Republic, which is a Spanish speaking island).

Dominica has spectacular hills and valleys, waterfalls and rain forests. It is a popular destination for American and European tourists, particularly those interested in diving and eco-tourism.

Dominica has been called the "nature island" of the Caribbean. Forests cover over 60% of the country and the hills and valleys are spectacular. There are over 365 rivers and the country has hot springs and the world's largest boiling lake which endows it with tremendous potential for geo-thermal energy and/or spa development.

The population of Dominica is approximately 72,000. The capital city is Roseau. The country's infrastructure is good with excellent water, power and communications. There are direct dial facilities worldwide via fibre optic undersea cable; and Internet and data transmission facilities are readily available.

Dominica does not have an international jet airport so overseas flights connect to Dominica's international airport using smaller turboprop aircraft. There are direct flights to and from Dominica from the jet airports at San Juan, Puerto Rico, Antigua, St. Lucia and the French islands, with onward connections to North America and Europe. A proposed site for a new international jet airport has been identified and development work is underway.

The world's major cruise ships dock at the new port facilities in Roseau. Over 200,000 tourists arrive by cruise ships each year and this has been increasing by over 20% per year.

Government
The Commonwealth of Dominica became independent from the United Kingdom on 3 November 1978. Dominica has a parliamentary style of government on the UK model and is a member of the British Commonwealth. There is universal suffrage and elections are due every five years. Executive power rests with the Prime Minister and his Cabinet.

Legal System
The Commonwealth of Dominica is an independent Sovereign State with a written constitution. The legal system is based on English common law.

Monetary System & Exchange Controls
Dominica is a member of the Eastern Caribbean Central Bank. The legal currency is the Eastern Caribbean (EC) dollar which is issued and regulated by the Central Bank.

The EC dollar is fixed to the US dollar at the rate of US $1.00 equals EC $2.6882. US currency is also legal tender on the island and is readily accepted everywhere.

The banking system is well established and there are both onshore and offshore banks. There are no exchange controls and funds are easily transferred into and out of Dominica.