Off shore business in the modern world

Abstract

The campaign against the use of offshore zones has been gaining new momentum lately due to certain reasons, among which are implementation of tax evasion schemes during the budget crises of a number of states, illegal capital flight, terrorism financing and inability to track financial flows channeled through offshore zones and identify the ultimate beneficiaries. Over the past half-century more than 60% of the global financial flows have passed through offshore zones transforming such places into major financial centers. Given the lack of transparency in offshore companies and governments’ inability to regulate offshore zones, many financial institutions warn that activities undertaken in offshore zones could trigger a new financial crisis. Consequently, major international organizations and several countries (such as the United States, Russia and certain European countries) have been introducing measures restricting the activity of offshore zones and the access for both organizations and citizens to the use of offshore jurisdictions. However, such policies are controversial because primarily protect potential benefits to government agencies.