Diamantaire Nirav Modi’s maternal uncle and owner of Gitanjali Group – Mehul Choksi is being reported as the mastermind behind the 13,500 crore rupees scam that has crippled one India’s largest public banks. After the unearthing of the scam, Indian law agencies have been trying to trace the location of the duo to bring them to book.
However, the fact that both Modi and Choksi have acquired citizenships of other countries is a major hurdle in this regard. Recent investigations have revealed that Mehul Choksi is now a citizen of the Caribbean nation of Antigua and Barbuda and he was granted Antiguan citizenship after being granted clearance from India in 2017.
Choksi’s link to Antigua has brought the limelight on this Caribbean nation and its reputation for being a ‘tax haven’. Here are some basic facts about it.
- Antigua is one of the islands of the twin island union of Antigua and Barbuda. Once a colony of Britain, it gained independence from the Crown in 1981. With a population of just 90,000 the island mainly relies on tourism to support its economy.
- Antigua is an offshore financial centre – the country specialises in providing corporate and commercial services, such as offshore banking licenses (international banking license) or the incorporation of offshore companies (international business companies). Often due to territorial taxation, OFCs also levy little or no taxes on corporate and/or personal foreign income.
- Due to its status as an offshore financial centre, Antigua is perceived as a ‘tax haven’ i.e. it allows companies to funnel money and avoid paying taxes. However, this is not really true. Shell companies are not permitted in Antigua and Barbuda. Antigua and Barbuda is a signatory to the Organisation for Economic Cooperation and Development (OECD) Common Reporting Standard under which the island is legally bound to report on bank accounts and other assets held in Antigua and Barbuda, to the tax authorities of the originating country. According to a February 2014 declaration, Antigua is compliant with the Financial Action Task Force on Money Laundering's '40+9' recommendations.
- Some of the island’s notoriety lends to the fact that Antigua was one of the very first nations to legalize, license, and regulate online gambling and is a primary location for incorporation of online gambling companies.
- Antigua allows high net worth individuals to gain dual citizenship through any one of three ways -- National Development Fund Contribution which requires a monetary contribution of US$100,000; purchase property valued at a minimum of US$400,000 in a pre-approved real estate area; and or invest US$1.5 million to establish a business.
- Citizens of Antigua & Barbuda can travel to some 118 countries without the need to obtain a visa including countries like Belgium, France, Germany and Hong Kong. In comparison, Indian citizens had visa-free or visa on arrival access to just 59 countries and territories.
- Some of the other notable residents/citizens of this island nation are legendary cricketer Sir Viv Richards, Virgin Atlantic Mogul Richard Branson, and talk show host/ philanthropist Oprah Winfrey.
However, the U.S. Department of State notes in its country profile that Antigua and Barbuda as an offshore center continues to be vulnerable to money laundering and other financial crimes. Hence, it might be some time before the Caribbean nation loses its notoriety of being a 'tax haven.'