News March 2002
Sector Developments
February 28 2002 OECD Progress Report
The OECD reports that it welcomes the commitments made in recent weeks by jurisdictions providing offshore financial services to co-operate with OECD countries in addressing harmful tax practices. A number of commitments have been accepted by the OECD's Committee on Fiscal Affairs and publicly announced (see original document) ahead of the OECD's 28 February 2002 deadline for receiving such commitments. Other proposed commitments received by the OECD are now under review. These commitments are part of a co-operative process established by the OECD to promote the elimination of harmful tax practices in jurisdictions identified in the OECD's 2000 Report, Towards Global Tax Co-operation. Jurisdictions that have made acceptable commitments to transparency and effective exchange of information will not appear on a list of Uncooperative Tax Havens to be issued in the near future.
The objective of the OECD's efforts to eliminate harmful tax practices is to encourage an environment in which free and fair tax competition can contribute to economic growth and development world wide. Improving transparency and establishing effective exchange of information play an important part in achieving this objective and the OECD welcomes the commitments by jurisdictions to achieve these aims. For further information regarding the OECD's perspective readers are invited to contact Nicholas Bray in the OECD's Media Relations Division (tel. [33] 1 45 24 80 90). More on Harmful Tax Practices.
Daniel Mitchell, Senior Fellow of the Washington based Heritage Foundation published a Strategic Memorandum in reaction to the OECD. 'Paris has Surrendered, Onward to Brussels'.
The February 28, 2002 deadline previously set by the OECD to receive so-called commitment letters from jurisdictions has come and past according to Dan Mitchell, and the OECD "...did not receive a single meaningful 'commitment'. Most low tax-tax jurisdictions ignored the OECD's imperialist demands. And the handful of regimes that did capitulate included the so-called "Isle of Man clause" in their commitment letter..."
As the new battle begins, he urge supporters of fiscal competition and economic liberalization to focus on defeating the EU Savings Tax Directive, he advises not to let the OECD Recover and brings a tribute to what he calls 'Courageous Governments'. (read)
February 1 2002 FATF Self-Assessment Exercise
At its Extraordinary Plenary Meeting on the financing of terrorism held in Washington, DC in October 2001, the FATF announced its plan to initiate a self-assessment exercise regarding the Eight Special Recommendations on terrorist financing. At the Global Forum February 1 2002 the FATF announced the completion of the first phase of a self-assessment exercise of its members against the Eight Special Recommendations to counter the financing of terrorism. 'The FATF Plenary meeting in Hong Kong and its global Forum demonstrate that countries throughout the world are united in ensuring that terrorists and those who support them are denied access to the international financial system', FATF President Clarie Lo said. The Forum stressed the importance that all countries in the world adopt and implement the Special Recommendations. The Forum called on all jurisdictions in the world to undergo a self-assessment exercise.
For this purpose, jurisdictions that have not already done so are invited to complete and submit a self-assessment questionnaire to the FATF Secretariat at contact@fatf-gafi.org by 1 May 2002. The completed questionnaires will then be used in determining the level to which jurisdictions have implemented the measures called for in the Special Recommendations.
Self-Assessment Questionnaire: FATF Special Recommendations on Terrorist Financing
[Microsoft Word document, 290 Kb]
In June 2002, the FATF will initiate a process to identify jurisdictions that lack appropriate measures to combat terrorist financing. The FATF notes with particular satisfaction the rapid and significant progress made by Hungary, St. Kitts and Nevis and the legislation enacted in Guatemala, The Philippines, St. Vincent and the Grenadines, the Russian Federation, Israel. Nauru has not adequately addressed the deficiencies found in the process of licensing, regulation and supervision of its offshore banking sector. FATF members will therefore continue to apply counter-measures against this jurisdiction. FATF is committed to working with Nauru to address the outstanding issues.
At the June 2002 Plenary, the FATF will deliberate with respect to taking countermeasures against those jurisdictions which were identified as non-cooperative in June 2001 and have not made adequate progress. It will also consider taking counter-measures against those jurisdictions listed in June 2000 whose progress in addressing deficiencies has stalled. For further information contact Helen Fisher, OECD Media Relations Division (tel: +33 1 45 24 80 94 or helen.fisher@oecd.oror the FATF Secretariat (tel: +33 1 45 24 79 45 or contact@fatf-gafi.org) The 2001-2002 typologies report is available at the FATF website at: http://www.fatf-gafi.org.
March 3 2002 Switzerland Voters Approve to Join the UN
The Swiss voters have spoken. In a referendum the Swiss voted with an ample majority for joining the United Nations organization. 54 % of the popular vote and 12 against 11 Cantons created the twin majority required under the Swiss direct democracy system. The decision by Swiss voters has been welcomed by the government with a mixture of relief and joy. The international press widely welcomed Switzerland’s vote to join the United Nations, describing the event as a decisive step away from its isolationist policies of the past. It hailed the result as 'putting an end to centuries of political isolation'.
Opponents however have warned that the vote 'will have financial and economical consequences because foreign confidence in Switzerland will fall'. Some investors are closing down their Swiss accounts 'due to changes in the market's perception of the Swiss franc as a unique safe haven'. The President of the Swiss National Bank, Jean-Pierre Roth, revealed that the country is set to hold onto its currency for the foreseeable future, observing that Switzerland is likely to 'remain an island in the middle of the Euro-ocean for years to come.' OFI invites its readers to review related articles: Swiss National Bank, Swiss Info, 'Have Swiss Elites sold out Sovereignty, the Nation & the Swiss Franc?'.
March 2002 Basel Committee: Know Your Customer’ rules
The Basel Committee on Banking Supervision issued guidance to banks and banking supervisors on customer due diligence processes last October, setting out minimum standards for the development of appropriate practices. The Guidance said clear and comprehensive ‘Know Your Customer’ rules are needed if banks are to avoid being used to transfer illicit funds for criminals, corrupt officials and terrorists. The committee also urged closer scrutiny of trusts, fiduciary accounts and companies, where accounts should be closed if the beneficiaries or owners could not be identified. It said special attention was needed for accounts of politically exposed persons such as heads of state, senior politicians and officials and others who may be able to abuse their position to enrich themselves. The decision to open such accounts should always be approved by a senior manager, and the source of funds investigated. The Working Group is to undertake further work on developing essential elements of customer identification requirements.
For the full story, see: www.bis.org/bcbs.
Additional OFI News In Brief:
UK Chapter Special Feature Section
The United Kingdom Chapter of the Offshore Institute through its Vice President, Simon Denton, reports on news from around the world.
The Offshore Institute and the OFI are grateful to the UK Chapter for providing this Special Feature Section addressing the issues and for contributing their time & effort in bringing such information to the attention of the Offshore Community. For comments and further information on the UK Chapter contact:
Simon Denton, Vice President UK Chapter
Sovereign Corporate & Fiscal Services Ltd
1st Floor Victory House 99 –101 Regent Street London W1B 4EZ
Tel + 44 (0) 207 479 7070 Fax + 44 (0) 207 439 4436
E-mail: sdenton@sovereigngroup.com
Website: http://www.sovereigngroup.com/
February 2002 EU to open information exchange talks
EU Finance Ministers reached agreement last October on a mandate to authorize the opening of a formal phase of savings taxation negotiations with six key non-EU countries on ways to tackle tax evasion. The aim of the talks is to persuade the USA, Switzerland, Liechtenstein, San Marino, Monaco and Andorra to agree to adopt anti-tax evasion measures, already agreed to by Member States, whereby an information exchange system would be implemented regarding interest payments on non-residents' savings.
The European Council set a deadline of the end of 2002 for agreement to be reached with key non-EU countries to adopt an information-sharing system, and if that is achieved then the system will go fully into effect by 2009. Under the EU proposals, member states and the six non-EU countries would be expected to share information on interest they pay to individual savers resident in the other relevant countries. For a transitional period of seven years, Belgium, Luxembourg and Austria would be allowed to apply a withholding tax instead of providing information, at a rate of 15% for the first three years and 20% for the remainder of the period.
It seems clear that there will be little resistance from the USA to implementing the exchange of information system requested by the EU but it is also difficult to see why Switzerland, in particular, would agree to introduce such measures because (a) they are in direct conflict with its banking secrecy laws; (b) Switzerland could expect to see a massive inwards movement of capital if it stays outside the EU system and a massive outflow of capital if it joins. Jurisdictions outside the EU system of exchange of information would expect to benefit enormously if the EU savings directive goes ahead. Suitable jurisdictions may include Bahamas, Hong Kong, Singapore and other well regulated and stable banking centers which are neither within the EU nor under the control of an EU member.
OECD modifies harmful tax initiative
Mr. Denton further reports that the OECD formally modified the tax haven aspects of its initiative to eliminate harmful tax practices by removing the 'no or nominal taxes' and 'no substantial activities' elements from the commitments it is seeking from co-operating jurisdictions. Commitments from listed jurisdictions will now be sought only with respect to the transparency and effective exchange of information criteria. The move, set out in a 2001 Progress Report published in November, came in response to the shift in US government policy under the Bush Administration. Publication had been delayed by Spanish objections over the status of Gibraltar.
The OECD also conceded that any potential framework of coordinated defensive measures would not apply to uncooperative tax havens any earlier than it would apply to OECD Member countries with harmful preferential regimes. To ensure that committed jurisdictions have sufficient time to develop implementation plans, the time for establishing a schedule has also been extended from six months after the date of making a commitment to one year. The 11 jurisdictions – Aruba, Bahrain, Bermuda, Cayman Islands, Cyprus, Isle of Man, Malta, Mauritius, Netherlands Antilles, San Marino, Seychelles – that had made commitments to eliminate harmful tax practices are to be permitted to review them in respect of the no substantial activity criterion.
Tonga, said the OECD, had addressed those areas that led to its identification as a tax haven in June 2000 and been removed from the list.
OECD exchange of information
It is envisaged that all Offshore Financial Centers (OFCs) would be required to introduce procedures for exchange of information upon request for criminal tax matters by the end of 2003 and on civil tax matters by the end of 2005. Simply stated, if an OECD resident comes under investigation by his local tax authority and that investigation reveals a connection between that resident and a structure in an OFC then the relevant authority (the onshore tax department) will make inquiry from the relevant authority in the OFC who will be bound to release information about that structure and who was behind it. Procedures to guarantee a speedy and unimpeded release of that information will have to be implemented by any OFC that wishes to stay off the OECD blacklist of uncooperative jurisdictions referred to above.
March 5 2002 ITIO opposes clamping of corporate vehicles
The International Tax and Investment Organisation (ITIO) - a committee set up to help smaller low tax jurisdictions respond to OECD and FATF demands - has accused OECD of double standards in its treatment of offshore taxation and corporate vehicles. ITIO Director, Ms. Lynette Eastmond, stated that developing jurisdictions are being asked to implement standards that OECD member states themselves refuse to accept. Ms Eastmond called for all parties concerned to work together to develop fair and equal international tax rules.
At 5 March 2002 The ITIO published 'Six Facts to keep in mind':
1. A week after the February 28 deadline set by the Organization for Economic Cooperation and Development (OECD) for its harmful tax competition initiative, five more states have signed off on agreements with the OECD
2. Of the remaining 23, one nation has indicated that it will not make a commitment, citing the lack of a level playing field among its concerns
3. Others are still in discussions with the OECD. Over the coming days, some may reach agreement, others may refuse to commit
4. The OECD has not published a blacklist and it will not blacklist anyone still in discussions
5. A major cause for concern remains the issue of a level playing field. The OECD wants small and developing economies to make changes before its own 'offshore' centers of Switzerland and Luxembourg, who have abstained from the process. Small states want all countries to move in step, fearing that business will otherwise migrate to the 'last man standing', which would enrich the OECD club at the small countries' expenses
6. The OECD cannot impose sanctions: only its member states can. It would appear that the USA and Canada are loath to do so. New Zealand has stated it would not do so. Australia stated only last Friday that it preferred a cooperative, consultative approach. (see: www.itio.org)
EUROPEAN NEWS:
January 2002 Isle of Man corporate service providers regime
The Corporate Service Providers Act became fully operational on 1 January 2002 (see OFI January issue). From this date, it became illegal to carry on regulated Corporate Service Provider business without a licence granted by the Financial Supervision Commission. But anyone who applied for a licence before 1 January 2002 will be able to continue in business pending determination of the licence application.
The Financial Supervision Commission (FSC) has issued a consultative paper on a new Companies (Amendment) Bill which is to be introduced during the current legislative session. The proposed Bill, designed to make urgently needed changes to the Companies Acts 1931 – 1993 and other related legislation, will also facilitate the introduction of on-line company incorporation, filing and searching service at the Companies Registry. The Companies (Amendment) Bill will also include legislation to provide for the formation of protected cell companies (PCCs) following a detailed review by the Insurance & Pensions Authority.
The PCC structure is particularly relevant to the captive insurance industry, but as a result of the review, the Treasury considers that there may be opportunities for it to be used by other types of companies and therefore it is intended that the proposals will apply to companies in general.
The Trustee Act, to replace and update earlier statutory trustee investment provisions was brought into force, at the beginning of last September. It follows similar legislation introduced into English law. The Act grants wide investment powers to trustees even where no powers are contained within the trust deed. It retains duties for trustees to have regard to the need for the diversification and suitability of investments and introduces a duty to obtain and consider proper advice before exercising powers of investment.
March 2002 Gibraltar rejects joint sovereignty talks
The UK and Spain have brought forward the target date for agreement on a new constitutional settlement for Gibraltar to this summer. They had previously set a deadline for the end of 2002.
The move is designed to make an agreement on a joint sovereignty arrangement possible during the Spanish presidency of the European Union which ends in June. A referendum on a new constitutional settlement could then be held in the second half of 2002. Gibraltar Chief Minister Peter Caruana rejected an invitation to join the bilateral talks that are aimed at delivering a new constitutional settlement that would also allow more self-government for Gibraltar. He said Gibraltar’s policy is that it only wishes to engage Spain in a process of dialogue that is both safe and properly structured. This would require the Gibraltar government to be present throughout all parts of the talks with a separate voice of its own and a right of veto rather than just a vote.
The fight over the sovereignty of Gibraltar has been rumbling on since 1714. Britain maintains its position that sovereignty will not be given back to Spain unless it is the wish of the Gibraltar people and they would almost certainly overwhelmingly reject any move to give Spain sovereignty over Gibraltar in part or in whole. This issue has received a lot of press coverage in recent months but the present position is unlikely to change in the near, middle or even distant future.
Meanwhile Gibraltar brought the Protected Cell Companies Ordinance into force on 1 November last year. It is the first domicile within the European Union to provide such a structure and the Ordinance is intended for use by both the captive insurance and funds sectors.
Jersey Criminal Justice Law
The Jersey Government has called on OECD to provide a level playing field in terms of international tax initiatives. Mr John Mills, Jersey's foremost civil servant, said the move was necessary to prevent the island's businesses moving to Switzerland. He explained the issue was the island's chief concern in preparing a response to OECD's reform demands.
Jersey has been lagging behind other offshore jurisdictions and incorporation numbers have been dropping steadily. Even Jersey-based professionals frequently recommend incorporating an offshore company in another jurisdiction with rather simpler legislation and easier administration. BVI has been the choice of most. Jersey maintains its pre-eminent position or trust business but is no longer one of the premier jurisdictions for private client corporate business. Therefore Jersey has made changes to reverse that trend.
The Companies (Amendment No. 6) Law, the first major overhaul of company legislation in Jersey since enactment of the Companies Law in 1991, was approved by the States and is due to be brought into force. The Criminal Justice (International Cooperation) Law, designed to extend the ability to cooperate with foreign legal authorities at the investigation stage to all serious crimes, is also due to be brought into force.
Amendments to the Financial Services, Banking Business, Insurance Business and Collective Investment Funds Laws, to widen the gateways for disclosure of information to foreign regulatory bodies, have been approved by the Finance & Economics Committee.
Cyprus approves tax reforms for EU membership
The cabinet approved radical tax reform plans last November as part of the preparations for membership of the European Union. The proposals envisage a 10% across-the-board corporate tax on companies, a gradual increase in VAT to the 15% minimum required by the EU and a reshuffle of income tax brackets to widen the tax-free income.
UNITED STATES NEWS:
US Patriot Act tightens 'offshore' rules President Bush signed the USA Patriot Act into law on 26 October 2001. Enacted in response to the 11 September attacks, its primary purpose was to provide enhanced powers of enforcement and surveillance in relation to terrorism but it also had significant implications for international financial institutions and offshore jurisdictions. At the insistence of the Senate it contained provisions to strengthen anti-money laundering rules and give a mandate for subjecting to special scrutiny those foreign jurisdictions, financial institutions operating outside the US, and classes of international transactions or types of accounts that pose particular, identifiable opportunities for criminal abuse.
Under section 311, the Secretary of the Treasury is empowered to take 'special measures' against foreign jurisdictions, financial institutions and international transactions that are a 'primary money laundering concern'.
These include requiring domestic financial institutions to:
maintain records and/or file reports concerning transactions
take steps to obtain and retain adequate information concerning the beneficial ownership of any account opened or maintained in the US by a foreign person
identify and obtain background information on the each customer of a financial institution permitted to use a 'payable-through' account in the US
and identify each customer and obtain and retain information on them as a condition to opening or maintaining a 'correspondent account' with a US financial institution.
Under section 312 any US financial institution that establishes, maintains, administers or manages a private banking account or correspondent account in the US for a foreign person is required to establish enhanced due diligence policies, procedures, and controls to detect and report instances of money laundering. As a minimum the US financial institution is required to:
ascertain each of the beneficial owners of the foreign bank with which the account relationship is established
conduct enhanced scrutiny of such accounts
and ascertain whether the foreign bank provides correspondent accounts to other foreign banks and if so, their identities.
Any US financial institution requested to open or maintain an account by or for a non-US person must ascertain the identity of the nominal and beneficial owners of that account and the source of funds deposited into them.
It is no surprise to see the US reacting quickly and comprehensively to the events of 11 September. The original draft of these provisions was significantly amended after lobbying by free-market organizations led by the Center for Freedom & Prosperity. As a result reference to 'special tax advantages to non-residents or non-domiciliaries' and 'tax havens' as criteria for identifying jurisdictions of primary money laundering concern were removed, making it clear that Congress does not want tax policy alone to be a reason for action.
CARIBBEAN NEWS:
BVI to establish Financial Services Commission
An independent regulatory body is to be established early this year under the Financial Services Commission Bill. This is the final substantial piece of legislation required for compliance with the core recommendations of the KPMG Review of financial regulation in the UK Overseas Territories. An Insolvency Act and other legislation recommended by KPMG is in the process of being drafted for introduction in the House after the Financial Services Commission Bill has been passed. A Code of Practice for Mutual Fund Managers and Administrators has also been drafted and will be put out to consultation shortly. BVI has delayed announcing changes to its legislation and procedures for as long as possible. Although these particular changes have been made to conform with the KPMG review they are also in keeping with what is required by the FATF and OECD.
Cayman Islands sign US Agreement
The Cayman Islands government signed an agreement with the US to provide for exchange of information, upon request, for criminal tax evasion, civil and administrative tax matters relating to US federal income tax.
It also provides for confidential treatment of information exchanged, and, in accordance with US law, any such information may not be disclosed to any third party. It applies to criminal tax evasion for taxable periods commencing 1 January 2004, and to all other tax matters for taxable periods commencing 1 January 2006.
The Companies (Segregates Portfolio Companies) Law has been amended to provide that any exempted company, including mutual funds, may apply to be registered as a segregated portfolio company. Use of segregated portfolio companies was previously restricted to exempt insurance companies.
As can be seen, the US is pursuing its own objectives separately as well as in tandem with the OECD. The US prompted the refocusing of the OECD’s 'harmful tax' initiative away from tax rates and on to exchange of information and expects to sign exchange of information agreements with over half of the 35 OECD-listed tax havens within a year. It seems that nobody need fear these agreements if they are using OFCs legitimately for tax avoidance rather than tax evasion. The signing of such a treaty brings forward the inevitable imposition of exchange of information procedures required by the OECD but will largely effect only US citizens who deal with or through the OFCs. It should be noted, however, that information obtained by the US may be exchanged with treaty partners under the terms of the bilateral taxation treaties signed by the US with most developed nations.
January 2002 Netherlands Antilles
One of the best holding company regimes used to be a Netherlands company owned by a Netherlands Antilles company – the 'Dutch Sandwich'. In recent years several other countries have initiated holding company regimes which compete with Netherlands or compliment the Netherlands regime so that often the best holding company route is either direct into Denmark, Luxembourg, Spain, Switzerland or UK or combines a company incorporated in one of those jurisdictions with the Netherlands.
The new Kingdom Tax Treaty between the Netherlands and the Netherlands Antilles was due to be ratified by their respective parliaments by the end of last year following final approval by both governments. The treaty will provide for an effective tax rate of 8.3% on dividends as of 1 January 2002. The Antilles has given ‘level one’ commitments to permit no erosion of this rate. This is the same rate as is currently applied but under the existing treaty the Netherlands collects 5% and the Antilles 3.3%. Under the new treaty the entire amount will be deducted in the Netherlands and then remitted to the Antilles. Ratification of the treaty will enable implementation of the New Fiscal Regime (NFR), approved at the end of 1999, which will repeal existing offshore legislation and remove the discriminatory elements between the offshore and onshore corporate tax regimes. Under the NFR, resident and non-resident companies will be taxed at the same rate of 34.5%. Previously offshore companies paid tax at a rate between 2.3% and 4%. Transitional rules will be applied to taxpayers currently benefiting from the offshore legislation.
FAR EAST NEWS:
Mauritius makes changes to Companies Act
The President of Mauritius assented to three major pieces of new legislation to upgrade the regulatory framework and the key underlying financial services structures last December.
The Companies Act is intended to upgrade the Companies Act 1984 in line with the latest developments in company legislation. Based on New Zealand legislation, it streamlines procedures for the incorporation, management and winding up of companies.
The Trusts Act aims to consolidate the existing laws relating to domestic trusts and offshore trusts into a single piece of legislation. It also contains measures to facilitate administration of trusts, whilst protecting the interests of beneficiaries, through the introduction of new ‘functionaries’ such as enforcers, in addition to the protector, custodian trustee and managing trustee. The Act also incorporates the concept of protective and spendthrift trust aimed at ensuring more efficient management of assets.
The Financial Services Development (FSD) Act provides for the establishment of a Financial Services Commission which will be the statutory body regulating non-bank financial services. Further to the Mauritius Offshore Business Activities Act 1992, it sets out new requirements for licensing those conducting financial services in Mauritius and new obligations in terms of record-keeping and disclosure.
Mauritius is still tinkering with this legislation but most of the major changes have already been made. Mauritius was one of the first OFCs to make a commitment to the OECD and this has paid dividends as it has attracted business which liked the certainty and might have otherwise gone elsewhere. The new Companies Act regulates both offshore companies and international companies – now know as Category 1 and Category 2 Global Business Companies – and consolidates the previous two Acts into one. In effect there is little change to the administration procedures for the incorporation and management of the two types of companies.
United Arab Emirates (UAE) approves Anti-Money Laundering Bill
A bill against money-laundering was approved by the Council of Ministers and will come into effect when signed into law by President Sheik Zayed bin Sultan Al Nahyan.
The United Arab Emirates (UAE) was identified as a conduit for funds tied to the 11 September terrorist attacks and the Central Bank froze accounts in respect of one of the names on a US list of people connected to the attacks.
The Law Regarding the Criminalisation of Laundering of Property Derived from Unlawful Activity gives the Central Bank power to monitor and control banks, money changers and other financial institutions.
It permits the UAE Central Bank to freeze suspicious accounts for up to a week, allows the courts to freeze such accounts indefinitely and provides penalties of up to seven years and fines of up to Dirham 300,000. The Law also provides for the creation of a National Anti Money-Laundering Committee to work with local and international financial institutions to combat money laundering.
Hong Kong: A Broader-Based Tax System?
The Advisory Committee on New Broad-based Taxes issued a consultation document last year on what types of broad-based taxes may be suitable for Hong Kong if required. The committee was established by the Financial Secretary last June in the light of projected future operating deficits. The consultation document sets out 13 options to broaden the tax base. The options fall into two groups – those that would increase the revenue productivity of existing taxes and those relating to introduction of new taxes.
The former includes raising the rates of salaries tax, profits tax and stamp duty on property as well as reducing allowances and deductions under salaries tax. Possible new taxes include capital gains tax, tax on interest, on dividends and worldwide income, a land and sea departures tax, payroll and social security taxes, poll tax, a general consumption tax and tax on mobile telephones and signboards. In making its recommendations, the Committee must have regard to the overriding principle of maintaining a low and simple taxation regime and preserving Hong Kong's competitiveness.
The Hong Kong economy is under some pressure. Unemployment is at record levels but is still less than 6% which is a rate most countries would be proud of. There will be a large budget deficit this year and the government is no longer able to generate much by the way of taxes from land transactions. Hong Kong is having a precautionary look at alternatives but as yet there is no suggestion but the current corporate taxation system will be altered. Hong Kong, being outside the OECD and the EU but still able to offer stability, holds an excellent banking system and a low or zero tax rate.
The Offshore Institute is grateful to the UK Chapter for providing this Special Feature Section addressing the issues and for contributing their time & effort in bringing such information to the attention of the Offshore Community. For comments and further information on the UK Chapter contact: Simon Denton, Vice President UK Chapter, Sovereign Corporate & Fiscal Services Ltd, 1st Floor Victory House 99 –101 Regent Street London W1B 4EZ ,Tel + 44 (0) 207 479 7070 Fax + 44 (0) 207 439 4436, E-mail sdenton@sovereigngroup.com Website www.sovereigngroup.com.
