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Banking, Insurance & Property

Banking

Banking is still in recovery mode in much of the world with the appalling incompetence and gross mis-management by many of the bankers still coming to light.  Banking, often perceived to be a risk in developing countries, generally fared better in countries like Antigua than they did in the U.S., U.K. and Europe due in part to the strict regulations in Antigua & Barbuda and due in part to much of the banking emanating from Canada, itself almost immune to the banking crash due to its strict banking regulations.

In many cases, banks only survived and continue to survive due to the backing of their governments.  That is much less true with banks in Antigua.  There was the much publicised collapse of the U.S. and Antigua based Stanford International Bank which suffered a failure due to an intervention by U.S. authorities.  Left alone or given the same assistance as many larger banks, it is possible that Stanford International Bank may have weathered the storm in the same way as so many other banks have  which were in a similar precarious position.  The Stanford subsidiary, Bank of Antigua is still thriving under its new name Eastern Caribbean Amalgamated Bank (ECAB).

Although not entirely without their problems, the local banks in Antigua & Barbuda have the backing of the government and the backing of the Eastern Caribbean Central Bank which regulates the currency within the nine country OECS (Organisation of Eastern Caribbean States).  With a stable government and adequate regulation, Antigua & Barbuda remains a sound investment for both overseas funds and property.

Banking Antigua

Offshore Banking 

Offshore banking is generally perceived to be the province of the very wealthy but that is not the case.  The 'comfortably' well off can benefit just as much as the very wealthy from offshore banking.  In recent years the role a bank plays in an individual’s life has changed and deteriorated.   Relationships with clients and customer service are things of the past, banks choose instead to service their customers with overseas call centres and computer generated correspondence, however, there are alternatives.  Private bank accounts from leading institutions in favourable jurisdictions such as the Caribbean island of Antigua can make all the difference.

Offshore banking in Antigua is protected by strict privacy laws and it is a criminal offence to reveal any confidential information relating to an individual’s banking or business activity with crimes severely punishable. Naturally enough these laws do not protect those involved in criminal activity and Antigua & Barbuda adheres to international anti-money laundering rules and other international treaties.  An offshore IBC established in Antigua and Barbuda can enjoy a tax exemption period of 50 years. This makes the twin island state incredibly popular with those looking for a secure, well legislated offshore jurisdiction. The International Business Corporations Act establishes the legal framework for the operation of offshore banking business within Antigua and Barbuda. A banking license must first be obtained from the Supervisor of Banking and Trust Corporations before commencing banking operations.

An offshore bank may engage in any generally acceptable banking activities from within Antigua and Barbuda and elsewhere, but it shall not knowingly accept deposits in the legal tender of a country of the Caricom region.  Offshore banking is the business of receiving foreign funds through acceptance of foreign money deposits payable upon demand or after a fixed period or after notice, sale or placement of foreign bonds, certificates, notes or other debt obligation or other foreign money securities, or any similar activity involving foreign money or foreign securities using foreign funds acquired as above to finance loans, advances and investments or the activities of the person carrying on the business A minimum paid up capital of US$5,000,000 is required. These funds must be paid into a bank in Antigua or major international bank overseas prior to the authorities issuing an international banking licensing.  An offshore bank is not subject to any reserve requirements as specified under the Banking Act which regulates the operation of local banks.

For all those engaged in legitimate offshore business, Antigua has many features that make it a popular haven.  Firstly the island state has a stable and secure democratic political environment, it has highly advanced communications and infrastructure, Antigua has tax free trade and processing zones as well as tax exemption periods for IBCs; the International Financial Sector Authority and International Business Corporations Department carefully control and protect the offshore sector and all those who open offshore bank accounts in Antigua or who establish their offshore operations in Antigua can feel secure in a jurisdiction that makes it its business to protect its investors and offshore clients.

A number of international banks have established operations in Antigua such as the Royal Bank of Canada and First Canadian Imperial Bank under the name First Caribbean International Bank.  There are also a number of private banks in Antigua that offer accounts and services to high net worth individuals such as Global Bank of Commerce.

The applicability of Antigua as an offshore destination for an individual’s banking, trust, company or general offshore needs is something that should be determined with the assistance of an independent financial specialist.

Insurance

Whether travelling to or living in Antigua insurance is always a consideration.  Not being an area subject to tropical diseases the health risks in Antigua are no different from many of the more temperate countries however, travel insurance is always advisable as there are limited state medical facilities and the private hospitals are not cheap. Medical insurance is available in Antigua from a number of specialist companies, however, it is advisable to arrange travel insurance in advance.

As with any relatively sophisticated country, every form of insurance is obtainable in Antigua either through local companies or through the affiliates of internationally renown insurers.  Most general insurers such as ABIB,  Anjo or Brysons will cover everything from household through vehicles to yachts either placed with Lloyds of London or other major insurers.  Both property and vehicle insurance is quite expensive.  

Due to the island being in the hurricane belt and suffering, rarely, the occasional small earthquake, property risks are quite high, however, by telephoning around as much as 25% can be saved on premiums and, if you are insuring a property, having hurricane shutters can often save you more in one year’s premiums than the cost of the shutters unless, of course, you chose to install electrically operated shutters.

Insurance Antigua

Antigua’s drivers are not known for their driving skills and although the speed limits are quite low, accidents are not uncommon which pushes up premiums for vehicles.  Again, shopping around does produce more competitive rates.

Being an island best known as a yachting centre Antigua has been trying to attract boats to stay throughout the year but, in the past, insurers have been reluctant to cover boats in hurricane areas.  Today, both U.K. and Antiguan insurers will insure boats both in the water and properly stored ashore Pressure is beginning to be applied to ensure that all yachts visiting ports and harbours in the Caribbean carry at least US$2 million in third party insurance.


Property

Over the last years Antigua has become one of the favourite destinations in the Caribbean for people looking for second or retirement homes.   Antigua offers a wide variety in villas and land for sale from managed resorts to individually built homes and vacant building plots.

The worldwide economic downturn has also affected Antigua.   After years of increasing sales and property prices the market has slowed down since the autumn of 2008 and prices have come down to levels which were seen a few years ago. The property market has not collapsed like in many other markets. There are a few reasons for this. Most property owners have a large equity share in their property. Prices were not over inflated and are reasonable compared to more developed islands like Barbados, the Bahamas, St Martin and St Barths. Britain’s Daily Telegraph rated Antigua as the world’s sixth best retirement country.

Having been very conservative in their lending and mortgage policies the banks in Antigua have suffered little from property depreciation.  Antigua does not have a large inventory of properties that are offered for sale and is expected to bounce back quickly when the world emerges from this crisis. With the current reduced price levels, there are many excellent opportunities for  purchasers.


Renting Villas

Ranging from a basic condo at US$ 100 per night to a lush fully staffed villa at several thousand US$ per night, there are many fine apartments, homes and villas for rent. Villa rentals can be a great alternative to staying in hotels. Renting a self-contained villa is a different and special way to experience island living. Most of these rental villas have swimming pools and close proximity to one of Antigua’s great beaches. Villa rental also provides a great opportunity for owners to get an income from their second homes while they are not using it.

Property Sales

There is a wide choice of locations and developments in Antigua and also a wide price range. Completed homes start at small condos at around US$ 200,000 at one end of the scale and large villas on large parcels with extensive gardens of US$ 20 million and more at the other end of the scale.

Established by wealthy Americans in the 1940’s and situated on the eastern, Atlantic coast is the Mill Reef Club on the eastern, Atlantic, coast. Other east coast developments include NonSuch Bay, a newly built high-end managed community, Emerald Cove and The Peninsula.  At the very high, exclusive end is Jumby Bay on Long Island.  Appealing to the yachtsman is the Grand Estates development in Dickinson Bay which one of the few developments in Antigua with pontoon berths available.


On the western, Caribbean side, Jolly Harbour is the main development. It is a  mixed resort built in the late 80’s.  development still continues within Jolly Harbour on individual building plots by private owners.  Some plots are still available for purchase. The property management of Jolly Harbour has recently been taken over by Caribbean Developments (Antigua) Ltd. (CDAL).  The principal activities of the company are real estate, property development and property management.  In Jolly Harbour their activities include upkeep of grounds, maintenance services to home owners and to businesses in the commercial centre, the operation and supervision of the entire infrastructure including water and electricity, security, accounting and any other service associated with the general upkeep of the Jolly Harbour Community.

Nearby, Sugar Ridge and other smaller developments benefit from the facilities offered by Jolly Harbour. Sugar Ridge features a Boutique Hotel, Spa, restaurant and shops. The Western side of Antigua enjoys spectacular views of the Caribbean Sea with Montserrat, St. Kitts and Nevis visible on clear days. Tamarind Hills is the newest development on this coast enjoying access to two beautiful beaches, Darkwood and Ffryes. 

Property for sale Antigua

In the north, the residential areas of Hodges Bay, Crosbies, Paradise View, Cedar Valley and Friar’s Hill are close to the capital, the airport, Cedar Valley golf course, Woods shopping mall and other amenities. The north is especially popular with permanent residents and returning Antiguans.

Out at Mamora Bay, ten minutes from English Harbour, Select Caribbean Developments are building six exclusive villas with high quality finishes and views over Indian Creek to the sea, each with 4 bedrooms and a swimming pool.

The English and Falmouth Harbour area is a vibrant community featuring historic Nelson’s Dockyard, Shirley Heights, several marinas, the Antigua Yacht Club and Spring Hill Riding Stables. Yachting has made this area famous and in the winter months a multitude of the world’s largest and most exclusive yachts visit its marinas. English and Falmouth Harbour offer a very large selection of bars, restaurants and coffee shops

Buying a Property

Antigua welcomes investors who buy or build property. Non Antiguan’s will require a Non Citizen’s Land Holding License which takes 3-6 months to obtain. When planning your building, be sure that you consider the climate, prevailing winds and other weather conditions, using a local architect familiar with these elements is highly recommended.  Time share properties are available in several locations in Antigua.  For more information click here

How to Buy, Sell or Rent a Property

For non-citizens a license is required to purchase property. The cost is 5% of the value of the property.  The process has speeded up considerably in the past few years but you still have a short wait for your licence. For vacant land, building must be started in compliance with the non-citizen’s license terms which usually means 2 years. Most property is fee simple or freehold. Leaseholds are rare and usually held by the Crown.  If you like the idea of buying in Barbuda you will probably be out of luck. You have to be born on the island to acquire property in Barbuda.

Government transfer fees are currently 2.5% for the buyer and 7.5% for the seller. Property taxes/rates are based on rental value and are low.  Legal costs for a transfer are 1% to 2% depending on the value of the transaction. 

There is no title insurance. Properties are registered at the Land Registry which is well organised. Copies of Land Certificates can be obtained for a small fee.  Always obtain a Cadastral Survey of the land/property you propose to buy from the Survey Office and have a land surveyor check the dimensions. Buyers quite often make the mistake of assuming that when a lawyer suggests a survey the lawyer is talking about a survey of the building.  He or she isn’t.  It is the land which should be surveyed as the boundaries are sometimes not where they appear to be from the fences.

Real estate agent commissions are 5% to 7%. The property management fee is usually 10%. Rental commissions are 8.33% for long term rentals and 20% for short term rental.  Withholding taxes are 25% of net rental income for non-residents.

Insurance coverage is approx. 2.0% of insured risk with a deductible of 2%. Insurance includes earthquakes and named storms.

Bank financing is available but interest rates are high by US or European standards and 30% or more cash deposit will be required.  If you are looking to buy a holiday home in Antigua it may be worth considering raising a mortgage on your main residence in the country where you live.

Most houses are serviced by a septic tank. Water cisterns are required by law.  Government electricity and water are usually connected or available nearby. Cable TV, landline telephone and broadband are available in most areas. Cellular telephone coverage is island wide.  More remote properties may be accessed by little more than a dirt track but most houses have access to adequate roads. Although all property is supposed to have access to the main highway, check that the road outside a property is part of the public road network and not someone’s private drive.

The Antigua Barbuda Investment Authority offers attractive fiscal incentives to developers including exemption from or reduction of payment of duty on the importation or purchase of raw materials, building materials, furniture, fixtures, fittings, appliances, machinery, plant and equipment for use in construction.

For a selection of agents see our Trades & Services Directory listed under Real Estate Sales & Rentals.     

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