Government slams financial secrecy report

Local authorities rejected the conclusions of the 2011 Financial Secrecy Index that claimed Macau still has much to do to dispel the secrecy that surrounds its offshore financial sector, questioning the basis of the report.
“We have doubts about the accuracy of the findings since we have no idea on what information and methodology this assessment is based on,” a Financial Services Bureau (DSF) spokesperson told Macau Daily Times.
The report put together by the Tax Justice Network (TJN) is based on data available at the end of 2010. It stresses that the territory does not make details of trusts, foundations or company ownership and accounts available “on public record”.
“In fact, Macau’s legal framework for corporate entities requires the registration of all forms of legal persons established pursuant to the Commercial Code, Commercial Registration Code or the Civil Code, including companies, partnerships and foundations,” the DSF replied.
In addition “trusts cannot be formed under the laws of Macau,” the bureau underlined.
“Although Macau has no domestic trust law, foreign law trusts are allowed,” TJN wrote. “Moreover, there are special laws governing the formation of trusts with non-resident settlers or beneficiaries,” the independent organisation launched in the British Houses of Parliament added.
“Companies under Macau’s Commercial Code are required to file identity and ownership information with the commercial register. Identity and ownership information is also kept by notaries, who are involved in the formation of such companies. Therefore, ownership and identity information for all relevant entities is available to their competent authorities,” DSF said.

Tax information

TJN said the MSAR “does not use appropriate tools for effectively analysing tax related information”. For instance, the report adds that residents or companies are not “required to automatically report” payments to all non-residents, dividends nor interest payments.
Local companies “are generally required to keep comprehensive accounting information under either company or tax law,” the DSF replied.
The report pushed Macau to the 23rd position among the world’s tax havens with 83 secrecy points out of a potential hundred, placing it towards the top end of the secrecy scale. In fact, only 11 countries and territories – including British overseas territories such as Bermuda and Turks & Caicos Islands – have a higher secrecy score than the MSAR.
However the territory had a better ranking than its score because it accounts for less than one per cent of the global market for offshore financial services, “making it a tiny player compared with other secrecy jurisdictions,” TJN wrote.
MDTimes asked the local financial regulator for data on the evolution of Macau’s offshore financial services in the last few years but received no reply.
According to the Monetary Authority website there were two offshore financial institutions operating in the territory as of last month: ‘Banco BPI’ and ‘Caixa Geral de Depósitos - Subsidiária Offshore de Macau’.