Antigua and Barbuda’s Prime Minister Gaston Browne has tabled dramatic, sector-altering reforms that will bring an end to the country’s long-standing offshore banking model as it currently operates, unveiling steep increases in mandatory capital reserves and the elimination of decades of preferential tax treatment for offshore financial institutions.
Speaking during his regular weekly public radio address, Browne outlined that the proposed reforms would raise the minimum required capital for licensed offshore banks from the current range of US$3 million to US$5 million to approximately US$20 million. He framed the sharp capital hike as a critical safeguard for depositors and a necessary step to shore up the resilience of Antigua and Barbuda’s entire financial system.
Browne emphasized that the existing low capital thresholds left the nation exposed to unnecessary systemic risk, arguing that the current requirements offered too little protection against institutional losses, mismanagement, and the potential misappropriation of customer deposits. “It’s just too low,” he stated, noting that a US$20 million minimum capital requirement would create a far more robust financial buffer that can absorb unexpected shocks without endangering depositor funds or national financial stability.
In addition to the capital overhaul, the prime minister proposed scrapping the preferential tax regime that has long benefited offshore banks, bringing them into parity with domestic commercial entities by imposing the standard 25% domestic corporate tax rate with no exceptions. “Any such entity operating in that sector should pay the exact domestic rate of tax — so 25%, no special dispensation,” Browne said.
The prime minister has already directed two key regulatory bodies — the Ministry of Legal Affairs and the Financial Services Regulatory Commission (FSRC) — to lead a comprehensive sector review and deliver formal recommendations for the restructuring framework. The review will not only cover capital rules and tax policy but also include new measures to crack down on profit shifting, a common practice where multinational firms move profits to lower-tax jurisdictions to avoid paying domestic taxes.
Browne made clear that the cumulative changes will fundamentally reshape the offshore financial sector, noting “Essentially, the sector as we know it will probably cease to exist.” Under the proposed new structure, the government would pivot to allowing only wholesale banking operations, including locally hosted branches of well-established, large international banks, while continuing to support the country’s existing international business company regime.
The prime minister justified the sweeping changes by noting that the legacy offshore banking model has failed to deliver meaningful economic value to Antigua and Barbuda’s broader population. He added that the sector has also drawn persistent, heightened scrutiny from global international regulatory bodies over concerns related to aggressive tax avoidance practices, weak regulatory controls, and allegations of widespread financial misconduct.
As of the announcement, none of the proposed changes have been finalized or enacted into law. Browne confirmed that the final regulatory structure of the reformed sector will be set once the government receives and reviews the formal recommendations from the Ministry of Legal Affairs and the FSRC.