Offshore Financial Centers Performing Well

By Global Tax Weekly

There has been further evidence in recent weeks of just how well offshore and low-tax financial centers are performing amid economic insecurity and regulatory change. Recently, we learned that the number of active companies registered in the Cayman Islands surpassed 100,000 earlier this year; that the Isle of Man’s e-gaming sector is going from strength to strength; that members of the Association of Bermuda Insurers and Reinsurers¬†reported a strong 2015; and that the British Virgin Islands is of the belief that it is on the cusp of becoming the best-regulated financial services jurisdiction in the world.

Of this list, the last one in particular stands out. For it was the BVI that was found to be home to many of the corporate entities set up for those exposed in the Panama Papers, and the jurisdiction was consequently excoriated by the world’s media and politicians as a consequence. So it will be interesting to see if the Panama Papers affair has any effect on incorporations in the BVI, and indeed other offshore jurisdictions, when company registration data covering the period since April 2016 emerges. We probably won’t begin to find out until the end of this year, or early next year. But I’m betting, if there is a dip in offshore incorporations, it’s probably going to be more likely to do with economic conditions, rather than reputational concerns. Like it or not though, the major IOFCs are largely compliant with international tax and anti-money laundering standards, and they are continuing to provide investors with what they want: fiscal efficiency, stability, flexibility, and legal certainty.

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