Tax Havens or Offshore Financial Centre Thesis Example | Topics and Well Written Essays - 3500 words

Tax Havens or Offshore Financial Centre - thesis ExampleRecently some countries have emerged as evident tax havens and are attracting hefty capital inflow. Singapore, Hong-Kong, Barbdos etc are only a few to name. In Asia, shoreward interbank markets began to develop after 1968 when Singapore launched the Asian Dollar Market (ADM) and introduced the Asian Currency Units (ACUs). The ADM was an alternative to the London euro-dollar market, and the ACU rule enabled mainly foreign banks to rent in international transactions under a favorable tax and regulatory environmentSimilarly in Europe, Luxembourg attracted investors from Germany, France and Belgium in the early mid-seventies (IMF, 2000) due to its low income tax rates, the lack of withholding taxes for nonresidents on interest and dividend income, and banking secrecy rules. On the same ground The Channel Islands and the Isle of Man provided precise similar opportunities. Moreover Bahrain began to serve as a collection center fo r the regions oil surpluses during the mid 1970s, after passing banking laws and providing tax incentives to facilitate the incorporation of offshore banks. In the Western Hemisphere, the Bahamas and later the Cayman Islands provided similar facilities. Following this initial success by other countries, a number of other small countries seek to attract this business. Many had little success, because they were unable to offer any advantage over the more established centers. This did, however, lead some late arrivals to appeal to the slight legitimate side of the business.