Dear Colleague,
This week we have something slightly
different, our review of a new publication in which you might
be interested - IFC Review. We also take a look at two recently
updated jurisdictions, St. Kitts & Nevis and the British
Virgin Islands. Also this week our report and intelligence
service, The World of Offshore Insurance, has been
fully revised and updated. You can find some excerpts below!
I hope you find this update useful.
Please remember
that you can customise your mailing preferences by visiting
your own profile
page
to choose from 29 offshore tax and law subjects in order to
receive just the information you want. You can also
unsubscribe completely by following the instructions at the
bottom of this page.
Kind regards,
Kate James
|
 |
I wonder if you have seen
the IFC Review - it's a new publication issued for the
first time this year by a London-based team of experienced
financial editors headed by publisher Robert Ayres,
setting out to describe the world of international finance
with the accent on 'offshore', tax efficiency, asset
protection and alternative investment. Just about the
ground we cover in the Lowtax Network, in fact, and
our team of journalists has been giving it the once-over,
promising not to let professional rivalry get in the
way of sound judgement. Well, I shouldn't have worried,
because everyone who has looked at the Review is full
of praise for the quality of the production and its
content. |
There are
articles describing 32 of the most important jurisdictions,
including obviously the likes of the Isle of Man,
Switzerland and Hong Kong, but also some 'high-tax'
countries which offer interesting structures like
the UK and the USA. Mostly these articles are written
by highly-qualified local business leaders, and they
steer well clear of excessive self-promotion. Then
there are ten more general articles surveying key
aspects of the international financial markets such
as hedge funds and the rise of China. Finally there
is a section of 'classified'-style listings of service
providers. In fact the publication is truly a mine
of useful information and advice for investors, businesses
and professional advisers themselves. We definitely
recommend it.
The IFC
Review costs GBP160 and you can subscribe now (discounts
are available!) for the 2008 edition: 29/30 Margaret
Street, London W1W 8SA, phone +44 (0) 20 7692 0932,
e-mail info@ifcreview.com; plus there is a web-site
with sample material at www.ifcreview.com. |
|
Intelligence
Report / Service
The World Of Offshore Insurance
Here is a short excerpt from
the introduction:
The offshore insurance sector
has been around for such a long time that it is difficult
now to imagine a world without 'captives'. Like the offshore
'products' offered to individuals such as the trust or the
International Business Company, captives were a corporate
response to the growing weight of taxation in the 1960s and
'70s. Insurance companies, whether offshore or onshore, have
always been tax deferral machines through their ability to
reserve against future claims, but it took a brilliant leap
of imagination for someone to see that the offshore self-insurance
subsidiary of a normal corporation could deliver tax benefits
to the parent while building up capital in a low-tax area.
Once invented, there was no stopping
captive insurance companies, and their rise through the 1980s
and '90s was meteoric, although major changes in international
business sentiment such as those caused by Hurricane Andrew
and 9/11 resulted in temporary setbacks. One-parent captives
were followed offshore by reinsurance companies, both because
the captives needed them, and because a reinsurance subsidiary
can help its insurance parent in the same way that a captive
can help its 'normal' parent.
It's not very clear why the insurance
industry itself didn't go largely offshore during this period:
perhaps a mixture of conservatism and regulation accounts
for it. But during the last decade of the 20th century the
US insurance sector at any rate began to respond to the growing
sophistication of the offshore industry, particularly in Bermuda,
by transferring ever larger chunks of itself offshore. By
the beginning of the new millennium, the process had reached
such a pitch that established US insurers who had stayed put
(because of the awful tax consequences of transferring their
substantial reserves offshore) were complaining to Congress
about the unfair competition they were facing from what is
euphemistically termed the 'Alternative Insurance Market'.
Ther report features the following
sections:
- Introduction: The History
of Offshore Insurance
- The Regulatory Situation
of Offshore Insurance
- Innovation in the Alternative
Insurance Market
The report goes on to provide
and in-depth study of the 20 main offshore jurisdictions which
offer captive insurance regimes.
Click
here to learn more. |
|
|
Tax-News
Headlines
|
Minimum Wage Tax Breaks Become
Collateral Damage, by Mike
Godfrey, Tax-News.com, Washington 03/05/2007 |
 |
President George
W. Bush has carried out his threat to veto the Iraq war supplemental
bill, which contained almost $5 billion in tax relief for small
companies. [
FULL
STORY ] |
| Tax
Revenues Soar To New High In Hong Kong,
by Mary Swire, Tax-News.com, Hong Kong
03/05/2007 |
 |
Total
tax revenue collected in Hong Kong soared to a record high
of HK$155 billion (US$19.8 billion) in 2006-07, up 7% on the
last financial year, Commissioner of Inland Revenue Alice
Lau announced on Wednesday. [
FULL
STORY ] |
|
CCCTB Proposal Progress Well Advanced, Says Kovacs,
by Ulrika Lomas, for LawAndTax-News.com, Brussels
03/05/2007 |
 |
Following
a first progress report in 2006, the European Commission on
Wednesday adopted a second communication on the progress towards
a Common Consolidated Corporate Tax Base (CCCTB).
[ FULL
STORY ] |
|
Offshore
ST. KITTS & NEVIS
St Kitts and Nevis are islands in the
Caribbean Sea, total 261 sq km in area, population 40,000. The climate
is tropical, tempered by constant sea breezes and there is little
seasonal temperature variation. There can be hurricanes.
The capital is Basseterre, on St Kitts.
Bradshaw International Airport, near Basseterre, can handle large
jets. There are now direct flights from New York, Philadelphia,
Miami and Gatwick.
St. Kitts became Britain's first colony
in the West Indies with the founding of a settlement in 1623. The
Federation of St Kitts and Nevis finally attained full political
independence within the Commonwealth in 1983 and, in order to relieve
the anxiety of Nevisvians, Nevis acquired autonomy within the Federation,
together with its own Legislature and Cabinet. In 1998, a vote in
Nevis on a referendum to separate from Saint Kitts fell short of
the two-thirds majority needed. Unlike most other English speaking
Caribbean jurisdictions, St Kitts and Nevis is neither a dependency,
nor a crown colony of Britain, which means that it is not subject
to the EU's Savings Tax Directive.
The legal system is largely based on
English Common Law, and appeal is to the Caribbean Court of Appeal
based in Trinidad and Tobago.
Although sugar dominated the agricultural
sector until 2005, when it was finally abandoned as a major crop,
activities such as tourism, export-oriented manufacturing, and offshore
banking have assumed larger roles in the economy. GDP growth was
good in 2004 and 2005, and the IMF predicts that St Kitts &
Nevis will be one of the stronger Caribbean economic performers
in 2007 and 2008, with 6% growth envisaged in 2007. The Federation's
currency is the East Caribbean dollar, pegged at 2.7 to the US dollar.
St Kitts and Nevis has offshore legislation
as a Federation, but so does Nevis independently. On the whole,
St Kitts focuses on attracting inward industrial and tourist investment,
while Nevis concentrates more on offshore asset protection. Nevis
has been particularly successful with its LLC (Limited Liability
Company) legislation.
In 2000, St Kitts and Nevis found itself
on the OECD and FATF blacklists, but was removed from both after
promising to tidy up legislative problems, which was done with a
number of enactments in 2001-2003.
Learn
more in our full St.
Kitts & Nevis Knowledgebase and St.
Kitts & Nevis News sections.
|
Offshore
BRITISH VIRGIN ISLANDS
The British Virgin Islands are an English-speaking
Dependent Territory of the United Kingdom, located in the Caribbean
off Puerto Rico. The BVI is politically stable; under the 1967 constitution,
the Governor represents the Queen and heads an Executive Council.
There is a 13-member elected Legislative Council.
Until 2005 the only significant tax in the BVI was income tax, which
applied to the relatively few local companies and to individuals;
there are customs duties and some real estate taxes. The population
of 23,000 (2006) is of mixed European and Caribbean origin. There
is minor tension between the settled population and recently-arrived
Caribbean economic migrants. The economy is highly dependent on
tourism, with financial services also important. In 2004 the government
abolished income tax for companies and individuals, replacing it
with a 'payroll' tax, shared between companies and employees.
While there is no pressure for major constitutional
change, in 2002 the BVI Government said it wanted to increase its
establishment and asked for some of the Governor's powers to be
transferred over, recognising the BVI's 'constitutional maturity
and prudential system of government'. At the end of February 2007,
the UK and the BVI government successfully completed negotiations
for a new constitution for the islands. Described by Lord Triesman,
British Minister responsible for the Overseas Territories, "as
an important step forward for the territory," the new constitution
devolves significant new powers to the BVI Government. The local
currency is the US Dollar, and there are no exchange controls.
The BVI introduced its outstandingly successful
International Business Company (IBC) in 1984, and by the time the
Act was superseded by the BVI Business Companies Act 2004, which
effectively removed the distinction between 'offshore' and 'onshore'
companies, well over 600,000 had registered in the jurisdiction,
Hong Kong and Latin America being the main sources of clients. The
BVI has significant mutual fund and captive insurance sectors. Banking
activity is, by design, quite minor. The BVI has tried hard to exclude
money-laundering, mostly with success, and has a relatively good
reputation.
In 2002 the BVI introduced a Financial Services
Commission to ensure independent and effective supervision of financial
institutions.
As from 1st July, 2005, the BVI, like other
British 'dependent territories', was forced to apply the EU's Savings
Tax Directive, and chose to apply a withholding tax (initially of
15%) to the returns on savings paid to nationals of EU Member States.
The Directive does not apply to corporate entities.
The BVI is a reasonably cheap jurisdiction compared
to its local rivals, and has quite strong professional services.
The Government is responsive to the needs of business, and its legislation
is mostly flexible and straightforward. There is an international
airport at Road Town; connections are mostly to Puerto Rico.
Learn
more in our full British
Virgin Islands Knowledgebase and British
Virgin Islands News sections.
|
|
