As part of a “historic” deal, G20 finance ministers have endorsed a global tax initiative aimed at curbing corporate practices by multinationals through the introduction of a global minimum tax of 15 per cent. Whilst the OECD has argued that the developments will “put a floor on competition over corporate income tax”, the proposals have been met with reservation from countries such as Ireland, which has expressed fears that the initiative will create an unattractive environment for business and investment. Through technical analysis and in-depth interviews with key industry figures, IFC Economic Report 2022 will explore the ramifications of the initiative for the world economy and IFCs in particular.
It is well-known that the ability to structure funds in a tax neutral way is important – and in many cases so is the ability to access double tax treaties. This has led to the development of numerous tax-exempt legal structures in jurisdictions that otherwise would apply taxes to passive income.
While recognising that having tax incentives is an attractive feature of many IFCs, our cover story will look Beyond Tax and the outdated and redundant notion of ‘tax havens’ by considering the wider role of IFCs and how jurisdictions are not necessarily defined by their tax rates.
Bringing together opinions, commentary and input from leading academics and prominent practitioners, this feature will demonstrate how IFCs offer a wide array of business entities and regulated spaces for different industries and services, including but not limited to:
We will also consider how post-pandemic government debts, digital trade and shifting global economic power are combining to redefine tax regimes and the role of IFCs.
In addition, we look at why it is important for IFCs to continue to champion evidence-based research to underpin the value they add, particularly in the wake of the pandemic as countries look to rebuild and in the face of a number of regulatory, legislative, political and reputational challenges coming down the track.
IN THE CHAIR
Don’t miss our comprehensive interview with Pascal Saint-Amans, director of the OECD's Centre for Tax Policy and Administration, on the issues of most concern to IFCs, including the details of the G20 minimum corporate tax initiative, tax challenges arising from the digitalisation of the economy, the implementation of the EOI standards and the BEPS minimum standards.
GLOBAL REGULATION AND POLICY
Interview with IMF: We question the IMF on topics such as a solidarity tax to aid COVID recovery, wealth tax, sustainable finance, FinTech and citizenship by investment.
EU: The EU has now created a monitoring body (Tax Observatory) to help drive policies against tax evasion and avoidance, as well as a new AML Authority to strengthen the EU’s financial system against money laundering and terrorist financing. We look at these new authorities and legislative proposals in more detail.
The future of Beneficial Ownership: The EU has been pushing member states to introduce public registries of beneficial ownership for some time, but will other regions follow suit? What are the challenges to implementing and maintaining public registries?
The legacy of Economic Substance: How has it ultimately impacted on IFCs? Despite initial warnings that economic substance enforcement could sound the death knell for IFCs, they have managed to jump yet another regulatory hurdle – how have they done this given that increased costs were inevitable and increased competition was likely from centres such as Singapore and Hong Kong? How has the Asian investment market responded? We also look at recent legislative changes in jurisdictions such as Bermuda, Cayman Islands, Guernsey and Jersey.
Money laundering: We look at how several jurisdictions are implementing mechanisms to combat money laundering and illicit finance; including Guernsey, which has established an Economic and Financial Crime Bureau (EFCB) to investigate money laundering and recover assets obtained through unlawful conduct. We also take a look at what Barbados is doing to combat money laundering. Meanwhile, following Malta’s recent addition to the UK’s list of high-risk countries for money laundering and terrorist financing, we consider how the country can fight back and continue to secure offshore investment.
ALSO: TECHNICAL ANALYSIS ON…
Nearly one year on from the end of the transition period, we ask:
ESG – INVESTING FOR THE FUTURE
Recently, companies are becoming increasingly judged by their Environmental, Social and Governance behaviour, particularly in the aftermath of the pandemic.
In this special focus, we look at:
TRUSTS & FIDUCIARY
The pandemic has demonstrated that there is a constant need for effective asset protection and succession planning structures. We look at how trusts continue to be a key component of the financial services landscape.
An inheritance tax is on the cards in jurisdictions such as Singapore and New Zealand, as well as a tax hike in the UK, in order to address wealth inequality. We consider the implications of this tax for wealth management and structuring in these regions and beyond.
As UK prepares to introduce the “Britcoin”, and other countries including China and the US investigate similar moves, what does the future hold for investors (e.g. a global tax regime to be enforced on cryptocurrency)?
Artificial Intelligence (AI) is becoming an increasingly influential phenomenon in the finance industry. We take a look at the latest initiatives and frameworks being introduced by jurisdictions such as:
AROUND THE JURISDICTIONS
As we emerge from the COVID-19 pandemic, we take a look at the latest regulatory and legislative developments and structuring techniques across the world’s leading IFCs, including but not limited to:
We also focus on upcoming and developing IFCs, including:
MARKETS: MIDDLE EAST
Substantial numbers of the world’s high net worth individuals (HNWI) and ultrahigh-net-worth individuals (UHNWI) are located in the Middle East, and those numbers are growing. We consider trends and developments in this growing market and look at which jurisdictions are the most popular for wealth structuring, asset protection and succession planning. We also review the development of wealth management structures based on local free trade zone laws and those of wider national application, in the context of the long-established use of foreign structures.
GFCI 2021: Z/Yen provide an overview of the key findings from the most recent edition of the Global Financial Centres Index.
BOOK REVIEW: Offshore Financial Centres and the Law: Suspect Wealth in British Overseas Territories by Dr Dominic Thomas-James; reviewed by Derek Sambrook, Managing Director, Trust Services, S.A.
RESEARCH/REPORTS: Comment and analysis on recent research pertaining to offshore finance and global wealth management, including: