Offshore Financial Centers
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This paper studies offshore financial centers, or OFCs, which are any financial institutions that conduct offshore transactions. The paper provides a technical definition of OFCs, and then discusses their historical use and relevance. Next the paper discusses the location of OFCs -- and answers why places such as Switzerland and the Cayman Islands host these institutions. The paper then examines the role of OFCs, focusing on their legal protection from investors' local tax burdens. The paper concludes with an assessment of the future of OFCs, citing the effects of international tax reform and other financial guidelines that may impact the perceived utility of OFCs.
Where are they?
Where are they?
From the Paper:"Offshore Financial Centers or OFCs are areas that choose reduced taxes or lenient financial controlling administration as a shield in case of overseas investors. (The future for offshore financial centers (OFCs)) IMF defines OFC as an area that fulfills the norms as stated below: it is a location marked by a large number of financial institutions, a majority of the business dealings are started in foreign shores, nearly all institutions are managed by non-residents, possesses assets and liabilities disproportionate to the internal economy; and has low or zero taxation, restrained or lax financial guidelines and privacy of banking business. The last norm is related to what is usually known as "tax haven". Nevertheless, whereas the description contains "tax havens" as well, it is not restricted to this category of country. (Canadian Direct Investment in 'Offshore Financial Centers) Offshore finance is, in its general meaning, the provision of financial services by banks and other representatives to non-residents. These services comprise of borrowing and lending of funds to non-residents. This can be in the shape of lending to companies and other financial institutions, financed by liabilities to the offices of the bank who is lending elsewhere, or to market participants. It can even take the shape of accepting deposits from individuals, and investing the profits in other financial markets. (Offshore Financial Centers: IMF Background Paper)"
Cite this Research Paper:
Offshore Financial Centers (2006, August 03) Retrieved June 16, 2019, from https://www.academon.com/research-paper/offshore-financial-centers-68116/
"Offshore Financial Centers" 03 August 2006. Web. 16 June. 2019. <https://www.academon.com/research-paper/offshore-financial-centers-68116/>