Finance Minister Grant Gibbons will today announce new legislative measures to lure foreign sales corporations (FSCs) to Bermuda.

The Minister will be speaking at the FSC/DISC (Domestic International Sales Corporation) Tax Conference in Florida, which began yesterday.

The Bermuda International Business Association believes that the Minister's announcement will significantly increase Bermuda's competitiveness for FSC business.

Delegates to the conference will also have an opportunity to speak directly to the Minister and others from the Island, during a reception hosted by Bermuda in Orlando tonight.

The Minister will be a featured speaker before the 200 US delegates attending the four-day conference that ends on Wednesday.

Chairman of the Bermuda FSC Association Mark Moffat said, "We expect that Dr.

Gibbons will be making a major announcement concerning legislation that will have a significant impact on positioning Bermuda as the major domicile of choice for FSCs. Bermuda, as a result, will become a focal point at the conference.'' He said there was a need to take a more competitive legislative position to attract FSCs that have chosen other jurisdictions, such as the US Virgin Islands, in which to register.

In addition to Dr. Gibbons, others traveling to Orlando for the conference include deputy chairman of the Bermuda FSC Association and assistant vice president International Banking at the Bank of Bermuda Clement Talbot, Conyers, Dill & Pearman senior associate Donald Malcolm and Appleby, Spurling & Kempe partner Shaun Morris.

Mr. Moffat said, "FSCs represent an area of potential growth in Bermuda's international business industry and we believe that the potential will be considerably heightened following Dr. Gibbons' speech.'' FSCs are corporate structures which are developed for the financing of large ticket items of equipment, including aircraft, rail cars and power generators.

The structures are driven by the preferential tax treatment that a jurisdiction has obtained from specific countries. Bermuda has been an approved jurisdiction since 1988.

FSCs allow US exporters, for example, to receive tax exemptions on profits on exported goods. The facility is used in leasing transactions with manufactured equipment such as aircraft and turbine engines.

One type of FSC can be commission-based, whereby a US parent company pays a commission to its FSC for acting as its sales agent. Another type is ownership-based, whereby the FSCs can buy and sell the US company's products.

In either case, tax benefits accrue to the US parent.

A Bermuda company could be set up to buy and own airplanes, and lease it to an airline, using the lease payments to pay back the loan used to buy the equipment.

Bermuda would derive benefits through company fees, legal, accounting and banking services that are required.

BUSINESS BUC