Despite the Swiss Leaks, the Panama Papers and the Paradise Papers, the world of offshore finance and tax havens is still opaque. To avoid the European Union blacklist, the crown dependencies of Guernsey, Jersey and the Isle of Man have stated that by the end of 2023 they will introduce measures to align with the European Union money laundering directive. However, the international tax challenge will only continue to grow because of increased digitalization and mobility of assets. A recent study (Damgaard & Elkjaer) found that USD 12 trillion of all foreign direct investment globally passes through empty corporate shells with no real economic activity. More than 85% of the global special purpose vehicles (SPV) pass through 8 tax-havens: Bermuda, British Virgin Islands, Cayman Islands, Hong Kong SAR, Ireland, Luxembourg, Netherlands and Singapore. Welcome to the world of financial tax engineering.
With the march of the robots leading the digital revolution, the deployment of digital banking in the offshore world is inevitable and will being with it a level of transparency that will be either fully embraced or greeted with suspicion …. Depending on your own perspective.
Understanding the Artificial Intelligence driven technology and appreciating the pro’s and cons of offshore finance. Is it a contract made in heaven or a dance with the devil?