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Broadly speaking the term Offshore applies to a group of countries, predominantly islands,
which offer highly attractive tax regimes to non-residents. Supported by internationally
minded legislation these countries have sought to bolster their economies by attracting inward
investment on a global scale. Many of these islands have developed into reputable and highly
regulated financial service centres. There are however other jurisdictions, not islands,
which offer attractive legal entities for the mitigation of tax for non residents and among
these are the obvious jurisdictions of Switzerland and Luxembourg and the less obvious ones
of the United Kingdom and United States of America.
In the past Offshore has often been associated with questionable dealings and large cash
deposits although it is likely that more money is laundered in one day in one of the leading
capitals of the world than in a year offshore. As the Offshore world has matured stringent
legislation has been introduced to counter this perception and many Offshore jurisdictions
now have regulations equivalent to, or greater than, their onshore counterparts. Far from
being a "No questions asked" environment most jurisdictions now offer highly developed
infrastructures with large banking and investment institutions and legal and accounting
practices well represented.
Below it is hoped to dispel some of the myths of Offshore:-
Banking Secrecy and Disclosure
Offshore banking, as with all banking, is founded on client confidentiality and certain
jurisdictions have enshrined this concept in law; bone fide investors can rest assured
that their affairs will remain confidential. Only in the case of strong suspicions of money
laundering, illegal arms dealing, drug trafficking or other major crime will banks, trust
and Trust and Trust and Corporate Service Provider s, lawyers, accountants and other professionals co-operate with
investigating authorities.
Taxation
Most offshore jurisdictions merely levy a small annual Government tax on companies owned
by non-residents of that jurisdiction; others only tax profits generated in or remitted to
that territory. In both cases the overall tax burden suffered by a company is generally
very low. Notwithstanding the local tax treatment of offshore companies and trusts,
individuals are urged to seek professional advice in their country of domicile and/or tax
residence as anti avoidance provisions may make the income of the company or trust fiscally
transparent to them.
Anonymity
Through the use of third party directors and nominee shareholders it is possible to ensure
that no public connection exists between the beneficial owner of a company or between the
Settlor and his trust - a fact which may be extremely important commercially and/or
politically. In the usual course of events this veil of anonymity and banking secrecy will
never be pierced.
It is however essential for both C(OS)L and the company's/trust's bankers to have a clear
idea of the identity of the beneficial owner(s)/settlor(s) and the documentation required
for this, and to establish source of funds, is set out in the Application Form section.
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