lessons of life in a tax haven - outdoor brass name plates

Say the word "tax haven" and all the gear of dirty spring: brass name-
Plate making company, gin
Wet expat
The recent failure of investors, Robert Maxwell.
Any business that operates from a place like Richmond or the Caribbean island will immediately bring a stain.
If it's legal, why is it running out of there?
On the other hand, when it comes to "foreign investment", the image is exactly the opposite: it is a vote of confidence in an attractive business environment, skilled labor and generally efficient economy.
As a result, British ministers are proud that Britain is not only the largest recipient of foreign investment in the EU, but also the world's second largest recipient of foreign investment after the United States.
The "tax haven" is dirty, and the "foreign investment" is squeaky --clean.
Now suppose you're in Barbados like me.
At this time of the year, it is not a particularly unpleasant idea.
This is an island-
14 miles, 22 miles-
But great success has been made in transforming its economy from sugar-dependent and other essential commodities to tourist paradise.
As a result, its 260,000 population is one of the highest living standards in the Caribbean.
But even if you do well, there are restrictions on traveling.
Leaving aside the danger of relying on one crop --tourism is one-
Third place in Barbados GDP
Wages are always under pressure.
No matter how hard you try to get yourself to the top of the market, there will always be other updates, and perhaps cheaper destinations follow.
Ideally, you should use another "crop" to support the tourism industry, preferably a crop that provides a high salary and employs a considerable number of people.
Financial services take a step forward.
How do you create a financial services industry that is not just a tax haven?
A: encourage "internal investment" in the field of financial services ".
On the surface, the tax haven model is very successful.
Various places, such as Monaco, the Channel Islands, the Netherlands and Luxembourg, create tax and/or regulatory advantages and become rich behind them.
But pure tax havens, those that exist only because of low taxes, are basically tax havens that provide names --
License plates for businesses thousands of miles away are under threat.
The EU does not like them;
S. Authorities worry, so much
The criticized hedge funds are legally overseas;
The OECD is conducting a study to try to understand how to curb the abuse of tax havens.
You can't stop wealthy retirees from escaping high personal taxes, the original driving force behind the prosperity of financial services in the Channel Islands.
You can't stop sports celebrities like Ian Wensan or Nigel Mansel from going to Jersey to live, just like you can't stop anonymous beach villas on Barbados's "Platinum Coast.
In a world without forex control, even if people leave their people in Kensington or Chelsea, you can't stop them from moving money overseas.
But you can try to stop the name.
Closing the business by closing tax loopholes makes it so attractive to transfer funds overseas.
If, for some reason, the European Union and British authorities decide to cut their spending, they may cause significant damage to places like Jersey.
Therefore, to some extent, the offshore financial services industry must be agreed by the national authorities.
The problem with places like Barbados is how to build an industry in Ireland, which has developed the offshore financial services industry by providing tax incentives, but one is done by Dublin people.
In the Irish case that Barbados is working on, the argument is that the financial services "factory" is no different from the PC factory.
If it is entirely correct to use industries such as tax relief, grants, to attract the production of tangible objects, then it is entirely correct to use the same incentives to attract the production of intangible services.
Barbados is therefore seeking to establish an offshore financial services business where the island has actually completed this work.
Winston Cox, governor of the central bank, called it "light tax jurisdiction "(
Nice phrases)
But just because of taxes, the Barbadian authorities see little point in attracting business.
They also need work to come here. Can it be done? I don't know.
A meeting is currently being held here for foreign financial services companies, and speakers have identified various areas where Barbados may seek specialization: E-commerce and fund management.
There's a well on the island.
The educated population, but the authorities here acknowledge that it needs to import professional skills.
I can come up with a worse way to get a smaller London fund manager through the winter, but if Barbados relies heavily on foreigners, that defeats the goal.
It is not clear whether the necessary skill base can be developed and maintained.
The country appears to be dealing with these issues in a thoughtful and sensible manner, with a focus on sound but friendly regulatory training for employees, free capital flows and predictable legislation.
But it is a very competitive market, and as Barbados has done in tourism, success in financial services is a daunting task.
In any case, there is a bigger problem here.
In a world where global capital flows freely and countries are free to develop tax systems designed to attract foreign investors, will we continue?
Will there be a rebound?
Some kind of rebound is happening.
Just last week, for example, the French and German finance ministers discussed the need for "tax coordination" in the EU.
You don't need to be particularly smart to realize that it means they don't like the UK's tax rates are lower than those in Germany and that's why it's more successful in attracting foreign investment.
So it's not just Barbados, Jersey, or even Ireland that are threatened by tax coordination.
The same is true of Britain.
Whether this rebound is enough to undermine the progress the world has made over the past 45 years in achieving freer trade and freer capital flows is another matter.
Developed countries have such a strong self
Keeping the interest in the free flow of foreign direct investment, I don't see them doing anything that seriously undermines that flow.
They are also limited by technology.
Global Telecom has become so stable and cheap that anyone can find a service industry that depends more or less on telecom anywhere in the world.
For example, you can put the call center half where people talk --decent English.
But we can expect that the government will try to contain extreme examples of abuse of tax havens.
If they are wise, they may be thinking about why their tax and regulatory regime will allow their citizens to try to escape them.
But I do not expect the wisdom of the government.
Therefore, this information is very clear for countries like Barbados.
Try to attract new foreign investment.
Financial services are indeed an important source of such investment.
But don't use the word "tax haven;
Put pressure on your business.
It is a friendly "light tax jurisdiction ".