Chapter 1 - Offshore Finance Centres

Offshore Finance Centres

An offshore center is a jurisdiction that provides a majority of its services to non-residents.

Features of an Offshore Centre

• Many financial institutions whose business is largely with non-residents
• External assets and liabilities are greater than those used in domestic economies
• Low taxation
• Moderate/Light regulation
• Bank secrecy
• Financial Expertise
• No Exchange Control Regulations

Exchange control regulations - controls imposed by governments that fear/are experiencing a scarcity of foreign currency or precious metals. These regulations restrict or ban the amount of currency that can be traded, sold, or removed.

Three uses of offshore centers include:

• holding and investment companies
• private client wealth structuring using trusts, offshore companies, and other entities; and
• tax-efficient structuring of international trade and investment

Onshore jurisdictions - a line drawn by the government and states that the area has a lower tax

FATCA and CRS - regulation in US and EUR that shares identity with finance centers leading to a lack of…