The Bahamas financial services sector, while still healthy and attractive, will have a tough time removing its stigma as a tax haven, especially as regulations from countries that enforce Organisation for Economic Cooperation and Development (OECD) standards become more stringent, a financial services professional told Guardian Business recently.
CEO of the Chartered Financial Analysts (CFA) Institute Paul Smith, said The Bahamas' recent downgrade by credit ratings agency Standard and Poor's will only serve to make the environment that much more complex. However, while it is "bad news" it can be a call to action for the government, businesses and the general public.
"If it helps change the regulatory environment, the support that the government has for the financial services industry, if it makes businesses think more clearly about what they're doing, if it makes people in the workforce think more clearly about what they need to contribute and what they need to put in rather than take out, well then all these things are extremely beneficial," he said.
According to Smith, the general public typically has a lack of understanding in how the role of government finances work. He said chartered financial analysts can and should assist the country's population better understand these kinds of processes.
Smith added that he has been extremely impressed by this country's regulators.
"I think The Bahamas has had historical challenges and those still linger," he said. "Reputation takes a lifetime to build and a second to lose.
"The Bahamas is a clean and well run jurisdiction. I'm impressed with the regulators I've met and I'm very highly impressed with the industry practitioners I've met. However, it takes forever to lose that stigma.
"The regulatory environment at the moment coming out of the major economies, whether it's Europe or the United States, makes it a very difficult backdrop for The Bahamas to make much headway in at the moment."

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