LISTEN: Antigua PM Browne Announces Major Overhaul of Offshore Banking Sector

Prime Minister Gaston Browne has announced plans for a sweeping overhaul of Antigua and Barbuda’s offshore banking sector, warning that the existing model could effectively cease to exist.

Speaking on his weekly radio programme, Browne said offshore banks could be required to maintain minimum capital of approximately US$20 million — a substantial increase intended to protect depositors and strengthen the country’s financial system.

“We’re going to clean up our offshore sector,” Browne said. “These offshore banks, we’re going to increase their minimum capital probably to about US$20 million.”

He argued that existing capital levels of US$3 million to US$5 million were inadequate and left insufficient protection against losses or the possible misappropriation of deposits.

“It’s just too low,” Browne said, adding that a US$20 million requirement would provide “a more significant buffer.”

The prime minister also proposed eliminating preferential tax treatment for offshore banks and requiring them to pay the same 25% corporate tax rate as domestic companies.

“Any such entity operating in that sector should pay the exact domestic rate of tax — so 25%, no special dispensation,” he said.

Browne said he has instructed the Ministry of Legal Affairs and the Financial Services Regulatory Commission to recommend how the sector should be restructured. The review will address capital requirements, taxation and measures intended to prevent companies from shifting profits overseas to avoid local taxes.

“There are some major changes coming in that offshore sector,” Browne said. “Essentially, the sector as we know it will probably cease to exist.”

He said the government could instead permit wholesale banking operations, including branches operated by established international banks, while continuing to facilitate international business companies.

Browne said the offshore banking industry was not delivering sufficient value to Antigua and Barbuda and had attracted sustained scrutiny from international bodies over taxation, regulatory controls and alleged financial misconduct.

The proposed changes have not yet been enacted. Browne indicated that the final structure would be determined after the government receives advice from Legal Affairs and the FSRC.

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