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Ifcworld 2019 IFCWorld 2019 ESSENTIAL ANNUAL INTELLIGENCE AND INSIGHT FROM THE WORLD’S LEADING INTERNATIONAL FINANCE CENTRES THIRD EDITION Brought to you by ClearView Financial Media: More than twenty years of insight into International Financial Centres in association with NEWS RESEARCH EVENTS AWARDS WEALTHBRIEFING - ALWAYS AT THE CENTRE OF YOUR 360° VIEW ON THE WEALTH MANAGEMENT LANDSCAPE With 60,000 global subscribers, WealthBriefing is the world’s largest subscription news and thought-leadership network for the wealth management sector Register for a free trial www.wealthbriefing.com ESSENTIAL ANNUAL INTELLIGENCE AND INSIGHT FROM THE WORLD’S LEADING INTERNATIONAL FINANCE CENTRES Welcome to IFC World 2019. We are very proud to publish this third edition of our yearbook of the offshore world which looks at the place that international financial centres occupy in relation to one another, the ways in which they relate to, and are coping with, the latest important trends and the prospects that they have for survival and prosperity, both singly and together. In this comprehensive annual, we draw on the expertise of some of the foremost authorities on the offshore world and also on our suite of publications: WealthBriefing, WealthBriefingAsia, Family Wealth Report, Compliance Matters and Offshore Red. The earlier sections of this edition contain insights from the leaders in the field, while the latter part contains a directory of the world of international financial centres. We hope that you will find the result informative and of lasting value. Stephen Harris Chief Executive ClearView Financial Media PUBLISHED BY: ClearView Financial Media Ltd 52 Grosvenor Gardens London SW1W 0AU United Kingdom Tel: +44(0) 207 148 0188 www.clearviewpublishing.com REPORT AUTHOR: Chris Hamblin - Editor, ClearView Financial Media REPORT DESIGN: Jackie Bosman - Head of Production & Design, ClearView Financial Media © 2019 ClearView Financial Media Ltd publisher of WealthBriefing, WealthBriefingAsia, Family Wealth Report, Compliance Matters and Offshore Red. All rights reserved. No part of this publication may be reproduced in any form or by any means, electronic, photocopy, information retrieval system, or otherwise, without written permission from the publishers. CONTENTS INTERNATIONAL VIEW 8 VIEWS FROM THE JURISDICTIONS: Bahamas 27 British Virgin Islands 31 Guernsey 37 Qatar 41 Samoa 44 Switzerland 47 Turks & Caicos Islands 50 JURISDICTIONS IN PROFILE 54 INTERNATIONAL VIEW: KEYNOTE ARTICLES INTERNATIONAL VIEW THE OFFSHORE WORLD: WHERE ARE WE NOW? * by Chris Hamblin, editor of IFC World Much has happened in the international communi- the Panama Papers (reported on last edition) but LESS NOISE THAN PREVIOUSLY ty since the last edition of IFC World was published. larger than the 260 gigabytes from the Offshore The Paradise Papers, as we shall see, had less of Leaks (a report disclosing details of 130,000 off- The Paradise Papers did lead to plenty of onshore an effect in terms of investigations and prosecu- shore accounts in April 2013, publicised by the In- enquiries about offshore assets, but not on the tions than their predecessors, the Panama Papers, ternational Consortium of Investigative Journalists same scale as their Panamanian predecessors. Ear- but their worth to onshore governments – many in Washington DC) and the 4.4 gigabytes of the ly in 2018 HM Revenue and Customs (HMRC) of of them desperate for revenues in the wake of ‘Lux Leaks,’ details about Luxembourg’s secret tax the UK was still struggling to cope with the fallout, the world financial crisis which began in 2008 – rulings that gave large multinationals preferential according to Parliament’s spending watchdog. The was immense in terms of useful anti-offshore treatment, also publicised by the ICIJ. Public Accounts Committee said that it was “far publicity. from confident” that the tax agency had sufficient Appleby hinted at the time that the leak might resources to scrutinise the evidence. In a report, have come from an online hack. As did not happen MPs concluded that the Paradise Papers high- “The records with the Panama Papers, the hackers/leakers this lighted the “potentially dubious practices of many time shone a light on a victim-firm that had plenty high-profile individuals and corporations” that used illuminated nearly of records of American activity. At least 31,000 of offshore services. The committee blamed a scarcity the individual and corporate clients in Appleby’s re- of resources. 50 years of Appleby’s cords were US citizens or had US addresses – more than from any other country. Appleby also counted Unlike previous leaks, the Paradise Papers uncov- business activity” the United Kingdom, China and Canada among its ered little in the way of intentional criminal tax most prolific sources of clients. The records taken evasion by those involved. Instead, they demon- The Organisation for Economic Co-operation and from Appleby, which has denied all wrongdoing, strate how properly structured and packaged off- Development has tightened its grip on the offshore illuminated nearly 50 years of the firm’s business shore assets and income can be held entirely legal- world, notably through the planned development activity. ly and attract little in the way of direct tax liability, of its brainchild, the Common Reporting Standard as long as they remain offshore. GlobalData’s 2017 or CRS, whose full title is the Standard for Auto- The papers exposed the tax engineering of more Global Wealth Managers’ Survey showed that tax matic Exchange of Financial Account Information. than 100 multinational corporations, including efficiency was the second most important reason The first exchanges of tax information under the their use of shell companies in Mauritius and Sin- for ‘offshoring’ wealth globally among high-net- AEOI are now taking place. Many jurisdictions are gapore to reduce taxes. They also shine a light on worth investors, cited by 18.2% of wealth man- now in the process of fine-tuning and indeed im- secretive deals and hidden companies connected agers. By contrast, client anonymity came in at a plementing their country-by-country reporting re- to Glencore, the world’s largest commodity trader, distant 2.8%. gimes and, despite much grumbling from offshore and provided detailed accounts of that company’s centres, corporate registers that display the names negotiations in the Democratic Republic of the of ultimate beneficial owners are springing up. Congo for valuable mineral resources. “Panic gripped Mossack The CRS is extending its influence in many ways. Apple, Facebook, Nike and Uber also received some Fonseca after it One such protraction is the OECD’s decision to criticism for using perfectly legal loopholes time mount a campaign against the phenomenon of and time again to avoid taxes in various jurisdic- realised that its records ‘golden visas,’ justifying its policy by claiming that tions. Apple moved a big portion of its offshore such visas damage the objectives behind the CRS. wealth from Ireland to Jersey by redomiciling had been hacked” The pioneers of golden visas have been the rulers two subsidiaries (one of which, Apple Operations of the United Kingdom, which has long offered cit- International, was thought to hold most of its Consequently, there seem to have been few, if any, izenship for sale but has recently toned its Tier 1 US$252-billion hoard of overseas cash) at one governments queuing up to pay the hacker/leaker visa programme down slightly, and its former colo- stage around the time when Ireland was tightening money for his full database. This is another depar- ny St Kitts, which first boosted its economy in the up its tax laws in 2015 under pressure from the ture from the Panama Papers. As Deutsche Welle, mid-1980s with a similar money-spinner. Together, European Union. The BBC reported that Appleby Germany’s international broadcaster, reported in they have set the standard for all others. managed the two firms between early 2015 and 2017: “The Federal Criminal Police Agency (BKA) early 2016. Like many hubs of the Caribbean, Jer- spent €5 million (US$5.7 million) to purchase A VERY PUBLIC CAMPAIGN sey collects no tax on profits for most companies. the Panama Papers database as part of its bid to The European Commission, in deducing that Ireland track down German-based tax cheats.” It also re- The so-called ‘Paradise Papers,’ leaked from the gave Apple an illegal tax benefit, calculated that ported that “the anonymous source who leaked international law firm of Appleby, revealed the the rate of tax for one of Apple’s Irish companies data from the Panama Papers is to be paid for offshore interests and activities of more than 120 for one year had been just 0.005%. information on Danish taxpayers...tax authorities politicians and world leaders, including Queen would pay around 1 million kroner (€133,000 or Elizabeth II and 13 advisors/major donors to US The emails in the leak indicated that Apple US$150,000).” In Denmark, critics argued, it is ille- President Donald Trump. wanted to keep the move a secret. The BBC gal for the authorities to pay for stolen information, quoted one senior partner at Appleby as saying: but the German constitutional court has excused The 13.4 million or so Appleby files also showed “For those of you who are not aware, Apple are it. Germany, according to Deutsche Welle, was the the interests of the owners of jets and yachts, in- extremely sensitive concerning publicity. They biggest loser among the nations when it came to cluding royalty and sports stars, using Isle of Man also expect the work that is being done for them transfers of profits to tax havens, losing €17 billion tax-avoidance structures. At 1.4 terabytes, this leak only to be discussed amongst personnel who need ($20.1 billion) per annum through base erosion and was smaller in volume than the 2.6 terabytes of to know.” profit shifting (BEPS, more of which later).
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