establishment of foreign sales corporations (FSCs) in other offshore jurisdictions.

And Bermuda FSC experts are calling for a reduction in annual Government fees so Bermuda can compete effectively with other domiciles.

Backed by Bermuda International Business Assocation, the Bermuda FSC Association's demands come soon after three of its representatives attended the tenth annual FSC conference in California.

Mr. Clement Talbot, manager of corporate banking at the Bank of Bermuda, said he and other Bermuda FSC Association representatives were excited by news of the vast opportunities the shift in FSCs from the US Virgin Islands will offer.

"A recent appeals court case ruled that US Virgin Islands commission FSC's must calculate their franchise tax based on gross receipts, rather than upon commissions,'' Mr. Talbot said. "This ruling reversed the USVI court's position, and is likely to result in some FSCs looking to do business in other jurisdictions.'' Barbados has been a chief recipient of new business because of aggressive marketing by its Government and individual businesses, he said. Registration fees are also lower in Barbados than in Bermuda.

"I believe Barbados this year hopes to have 200 new FSCs on their register, that have shifted from the USVI,'' said Mr. Talbot.

The Bermuda FSC Association would like to see the fees reduced from $1,600, the minimum stamp duty fee applicable to all exempted companies that incorporate with minimum capitalisation, to $1,000.

"The cost of doing business in Bermuda is being examined and recommendations have gone forward to Government that fees should be reduced,'' said Mr.

Talbot.

Minister of Finance the Hon. David Saul said he had no knowledge of requests for a reduction in fees for FSCs and could not comment.

While Bermuda is the domicile of choice for FSC's whose tax-exempt structure is based on the leasing of exported equipment, such as aircraft, the Island had lagged behind in exploring the opportunities presented by those FSC's whose tax-exempted structure is based on sales of exported manufactured goods.

There are an estimated 4,500 FSC's in existence, 100-150 of which are believed to be registered in Bermuda.

In the New Year, discussions will begin between BIBA and the Bermuda FSC Association to map out a plan to aggressively market the Island as a premier FSC jurisdiction.

Mr. Talbot was one of three Bermuda FSC Association representatives attending the conference.

Mr. Donald Malcolm, a lawyer at Conyers, Dill & Pearman, made three presentations, and Mr. Kevin Taylor of Fairway Management also attended.

Mr. Donald Malcolm.