As I sat in my hotel room in New York in the early hours of
Wednesday, 9th November 2016, having been awoken from my slumber by
the screaming and cheering from across the road at the Hilton's
Trump Election Party, my first thought was that the world in which
we live will most certainly change once President-Elect Trump
vacates his golden palace for a White House early in the new
Change for sure, but for the better? And, if so, who is most
likely to benefit? Much closer to home, what does it mean for us
here in Bermuda?
It is hard to be definitive on the possible effect of Mr.
Trump's policies on Bermuda, and the offshore world generally,
as so few have been laid out in any detail and there is a paradox
at the very heart of his future presidency. He espouses a challenge
to the maintenance of offshore accounts by American corporations,
yet he has personally invested in many of the companies that do so.
He also seems to have taken advantage of every tax loophole
available in his own business dealings over the years to pay the
minimum amount of tax he is legally obliged to pay. As Mr. Trump
explained to supporters on the campaign trail earlier this year,
when it comes to his own business enterprises, "I pay as
little as possible. I use every single thing in the book." He
famously refused to disclose his own tax returns. He is a veteran
of the business world, the world in which offshore financial
centres are used on a regular basis in multi-jurisdictional
Nevertheless one of the key planks in Mr. Trump's economic
platform is the "repatriation" of American corporations,
and their potential tax revenue. Basically, by revising the U.S.
tax code and offering certain incentives, Mr. Trump would seek to
bring those American companies and their earnings back to the
United States. That sort of philosophy, of course, is bad news for
jurisdictions such as the Cayman Islands, which is in the business
of keeping such money parked securely offshore. Bermuda is not, and
never has been, a real player in that market. We do not have
"brass plate" banks and financial institutions, with a
heavily regulated banking industry being very careful as to the
sources of funds and the types of customer we welcome. Anyone who
has recently tried to open a bank account at one of Hamilton's
banks will know it is no easy task these days with the anti-money
laundering, know your client, due diligence almost oppressive in
We also have an economy which has a substantial on-island pillar
in the insurance and reinsurance business – a legitimate
local industry which proves invaluable globally day to day as well
as when disaster (such as Hurricane Katrina) strikes.
Of course, it would be foolhardy to say that the policies laid
out by the President of the United States of America do not affect
Bermuda. We lie but a few hundred miles off the coast of the
Carolinas and our economy is closely linked with the United States.
We must do everything we can to ensure that relations remain
cordial and positive in order to support our tourism and
international financial business sectors. We must hope that his
election agenda to introduce policies that support economic growth
and fair trade that is intended to lead to an increase in the
wealth and disposable income of Americans bears fruit. In turn, we
can seek to encourage these very people to visit Bermuda on
cruises, on vacations, to buy high end real estate, to bolster our
recovering tourism industry.
The protests that I witnessed first-hand on the streets of New
York on the day after the election were very real in their
animosity towards the President-Elect and he will have many
challenges to overcome as his Presidency takes shape. Will the
likes of Bermuda feature heavily in his thinking? I would suggest
not, at least in the short-term, but it may be that there are
knock-on effects, both good and bad, some possibly unintended, from
his policies which could impact us here in the Mid-Atlantic. It is
for our government and business community to stand tall and
continue to strive to get across the message about the advantages
and uses of Bermuda as a vibrant international financial centre,
the benefits of a vacation or investment in our paradise isle and
the value of our contribution to the vitality and success of
business enterprises globally.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The line between rectification and improvement is a significant one in terms of trust documents. The Jersey Royal Court's judgment In The Matter of the H and J Trusts further clarifies the distinction.
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