The financial services department of Caribbean Land and Property has been working tirelessly to make sure that our clients do not only receive the quality service they deserve but are cognizant of various aspects of the offshore sector.
The offshore sector is dynamic and has the potential to experience tremendous growth as we have witnessed over the pat few decades; to the effect that offshore havens are under heavy pressure from mainly first world countries belonging to the Organization for Economic Development and Cooperation.
Put aside the negative criticism and lashing that governments of offshore jurisdictions have gotten as a result of this, offshore entities have assisted people tremendously in protecting their assets, improving the financial situation of themselves and businesses and finding new innovative ways of developing their businesses in new regions.
It is sad that offshore havens have been tied in with the war on drugs, money laundering and terrorism especially after September 11, which of course is a sad event in American history. But in various parts of the world, war is endemic and disease just seems to be a normal part of life while millions of children die from starvation, much of which goes unnoticed or receives only a mere fraction of the attention it deserves. Instead on the television we view pornography, crime and extreme wastage – and they are all normal as our children are being socialized into communities and cultures that have forgotten what is wrong from right, well… except where the government’s tax money is concerned.
There’s been so much hoopla surrounding the loss of federal revenue to offshore havens and the part that these bad governments who only suck the wealth of rich countries by granting favorable tax treatment to foreign companies and nationals of foreign countries who seek relief from the tax burdens they are oppressed with by their governments.
Calls for different types of reform in government policies on war, crime and government spending have largely fallen on death ears. And whilst taxes do serve a primary function in providing social services and maintaining welfare programs it is left to be wondered if the benefits received from paying taxes are neutralized by increasing costs of living, unemployment, less public security and the lack of morals that our children are being fed with in the promotion of a free society.
It goes without question that people should be allowed to freely choose the lives they live and ideals they aim for, but what part do governments play in curtailing or even renouncing certain practices when child pornography, for example, is widespread on the television and songs with the most obscene lyrics blast the air waves. Surely, these issues may sound ridiculous to some, but moral values in our societies today only seem to be limited to the very few things that our governments and certain groups place priority on, deem important to their own agendas, and are not necessarily in the best interests of the common man. But as I said before, these issues have absolutely to do with money.
Some countries also enjoy showing off their military and economic might, so really, it is easy to scare and intimidate small offshore havens into their shells. Because offshore havens are frequently small poorer countries which go into offshore financial services in order to diversify their economies and create jobs for their citizens, bigger countries which do not depend on offshore financial services are better able to threaten with sanctions.
It has become more and more evident that countries should direct more of their resources to exploiting their natural resources in order to create more subsistent economies and eventually to become less dependent on richer countries for trade and financial help. The mere fact that these smaller countries are dependent of richer countries in one way or the other makes it difficult for offshore havens to defy the overwhelming demands of OECD countries.
We would like to dedicate one of our articles to the subject of banking secrecy because this is one of the main areas of the offshore sector being affected by the demands of OECD countries. Over the past few month offshore havens have been signing tax information exchange agreements as their commitment to transparency in their offshore operations. Tax havens which have not yet built extensive tax treaty networks or signed tax information exchange agreements have expressed their commitment to working along with the OECD and implementing international standards.
The matter of privacy comes to the forefront when deciding on an offshore haven for incorporating or registering an offshore company. There is a big difference between an offshore haven which is dependent and one that is fully or partially dependent on a mother country. The recent events in the BVI give us a clear example of this point for whereas the BVI were required to implement laws as dictated by Britain after measures such as the EU Savings Tax Directive were made effective. Even though the islands were able to negotiate to the extent to which they would implement the directive, this situation points out the advantage an independent offshore may have over one which is not. In this situation, EU nationals looking to obtain 100% uncompromised privacy may not want to incorporate in the BVI.
With offshore privacy being threatened as is happening, many holders of offshore accounts and people who have incorporated offshore companies fear risking the very protecting they sought by opening these accounts and setting up offshore companies. Furthermore, the battle is not only concentrated on taxes, but threatens international free trade and relations as governments try to monitor the every move of their citizens.
(c) Caribbean Land and Property July 2009