Trump, IFCs, And The New World Order

A Century Of International Tax Misgovernance

There has never been a level playing field, or anything close, in the history of international tax. We can think of three main phases to that history.

First, the ‘pre-governance’ phase in the centuries during which European empires dominated the planet. The only significant international aspects of tax in this phase were the ways in which tax was used as a channel for extractive exploitation – whether that took the form of charter companies like the British East India Company raising taxes (so that India effectively paid for the wholesale exportation of its own goods to the UK), or colonial authorities taxing local populations to pay for the costs of their own occupation (and sending anything extra back to the metropole).

The second phase saw the establishment of ‘imperial governance’. The League of Nations, the club of imperial powers, set tax rules in the 1920s and 1930s that sought for the first time to systematically address the distribu…

With contribution from:

• The Organisation for Economic Co-operation and Development (OECD), Paris, France
• Daniel J Mitchell, Senior Fellow, The Cato Institute, USA
• Tove Maria Ryding, Policy and Advocacy Manager for Tax Justice at the European Network on Debt and Development (Eurodad)
• Luke Dorman, Researcher/Analyst, and Mark Pragnell, Managing Director, Pragmatix Advisory, UK
• Andrew Morriss, Texas A&M University, US
• Aparna Mathur,  Visiting Fellow, FREOPP & Senior Research Manager in Economics, Amazon

We have certainly seen a sharp shift towards populist politics in this year’s general elections across the G7 and beyond, but whether that shift leads to the prediction made by Alcuin remains to be seen. What we do know, though, is that the general elections this year are the latest point on a broader set of geopolitical changes that have been in train since the global financial crisis of 2007/08. International financial centres have little control over these changes, and have to continue to adapt and evolve if they are to thrive in what is emerging as a new world order.

Three Scenarios For The Future

In our 2022 report for BVI Finance, Beyond Globalisation, we set out three potential future global economic scenarios: weaker internationalism, the bloc economy, and new economic nationalism. Following the major elections in the United States, United Kingdom, Germany, and France, we’ve revisited our scenarios to see which is likely to predominate over the coming years, and what that could…

The Authority represents the Cayman Islands in various global forums, including the Financial Stability Board, the Caribbean Financial Action Task Force (CFATF), the Bank for International Settlements (BIS), the International Organisation of Securities Commissions (IOSCO), the International Association of Insurance Supervisors (IAIS), and the Group of International Financial Centre Supervisors (GIFCS). CIMA not only contributes to developing global standards for financial services regulation but also ensures that the jurisdiction adheres to these standards and best practices. To foster effective supervision and combat financial crime, CIMA has to date entered over 65 MMOUs/MOUs with international organisations and jurisdictions worldwide.

CIMA has implemented a range of supervisory tools and issued numerous policy measures to support and provide guidance to the industry stakeholders for complying with relevant legislative obligations. The Authority maintains close collaboration with th…

Trust Disputes

Cayman Islands trusts remain a popular way to preserve family assets and to control how, when, and in what amounts wealth is passed down to future generations. Settling assets on trust can serve important asset protection functions, and professional trustees can ensure that valuable family and business assets are protected for generations to come, even in the event of the all too common family breakdown among members of the beneficial class of the trust.

However, the role of trustee of a Cayman Islands trust is not one to be accepted on a whim. In a modern and highly regulated world, which now includes families who may have generated their wealth in novel ways and individuals with a greater propensity for litigation, the position can involve exposure to great risk and liability. Raw family wounds, generational rifts, and suspicions of wrongdoing are the bread and butter of trust disputes in the modern world and are on the rise.

The GFCI is a factor assessment index that combines two distinct sets of data to create a rating for financial centres:

Instrumental Factors: Quantitative measures focused on cities and countries provided by a wide range of organisations including the United Nations, OECD, and World Bank. A total of 143 instrumental factors were used in GFCI 36.
Financial Centre Assessments: Ratings of the competitiveness of financial centres and of their strength in FinTech provided by finance professionals across the world by means of an online questionnaire which has run continuously since 2007. For GFCI 36, Z/Yen used almost 40,000 assessments of centres provided by over 6,000 individual respondents to the survey.
A feature of the development of IFCs has been the growth in the number of financial centres working across borders. In 2007, GFCI 1 provided ratings for 46 financial centres, including just two IFCs – Cayman Islands and Bermuda. GFCI 36, published in September 2024, provides ratings for 121…

Niekia Horton, CEO and Executive Director of Bahamas Financial Services Board, showcases the Bahamas’ firm focus on being the Caribbean’s most complete and thriving financial centre, committed to upholding integrity in the financial system.

Antoine Bastian from Genesis Fund Services showcases the transformation of the Bahamas' financial services through legislative reforms, public-private partnerships, and innovative solutions like crypto regulation and carbon credits.

Lakera A. Russell and Dwayne Whylly from GSO Legal explore how AB Capital launched a mixed asset investment fund, utilizing the Bahamas' robust regulatory framework, skilled workforce, and innovative financial services.

Next, Dr Iyandra Smith Bryan from Quantfury Trading shares her advice to traditional financial institutions: to thrive amidst FinTech innovations, they must adapt, prioritize client needs, and embrace technological advancements.

The Bahamas leads in sustainable finance with robust ESG regulations, offerin…

An amending regulation to the European Long-Term Investment Funds Regulation (Revised ELTIF Regulation) applies from 10 January 2024. The aim of the Revised ELTIF Regulation is to encourage long-term investments in the real economy, which includes listed and unlisted private companies, infrastructure projects, and real estate that may require long-term capital investment. ELTIFs have the potential to address financing required for environmentally sustainable investments. The Revised ELTIF Regulation provides retail investors in the EU an opportunity to invest in private market investments and infrastructure funds, which to date was not available to the retail market.

ELTIFs In Ireland

The Central Bank of Ireland (Central Bank) has introduced a new chapter in its AIF Rulebook. The ELTIF chapter sets out the domestic supervisory and reporting requirements application to Irish-domiciled ELTIFs. From 11 March 2024, the Central Bank is open to applications for authorisation of closed-ended …

This feature examines the benefits and intricacies of these programs, including the legal frameworks, financial commitments, and strategic advantages they offer. By exploring the burgeoning market for citizenship and residency by investment, we reveal how these initiatives facilitate greater global flexibility and a pathway to a secure, diversified lifestyle.

Uncover the shifting focus of global initiatives like FATF and the nuanced implications of Public Registers of Beneficial Ownership, and stay informed on key legislative reforms shaping the future of economic transparency.