Banker sees big off-shore bank benefits

Press, 22 July 1986, Page 39

Banker sees big off-shore bank benefits

PA Wellington The establishment of off-shore banking units in New Zealand would bring substantial benefits to the country, the chief executive of.Broadbank Merchant Bank, Mr Brian Perry, said yesterday. New Zealand financial institutions need have no fears: over proposals to introduce OBUs, he said.

An OBU is a foreign bank usually handling foreign exchange, eurocurrency and domestic money market transactions, in a centre where the capital market is free and enjoys tax advantages:. The establishment of off-shore banking units had been the subject of representations to the Minister of Finance, Mr Douglas, in recent weeks. In order to attract the

international banks to establish OBUs, New Zealand would need to introduce a special corporate rate of tax of 10 to 15 per cent on off-shore business, the same rates that apply in off-shore banking centres like Singapore and Hong Kong. Mr Perry, who was recently appointed chief executive of Broadbank Merchant Bank, has. had 13 years experience in international merchant banking in London.

• The main benefit to accrue for New Zealand would be through taxation, Mr Perry said.

Even at a lower rate of taxation than the present corporate rate, New Zealand would still gain a substantial taxation benefit from OBUs, he said. "Off-shore banking units will not come' to New Zealand unless we reduce the level of taxation for off-shore business, and so we are really talking about taxation dollars that New Zealand would otherwise not receive.” New Zealand was ideally situated in the international time zones for foreign exchange dealing.

He said that those dealers who were in their offices in New Zealand early, could speak to New York at their lunch-time.