IFC Review 2021

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Editor's Note:

Welcome to the new edition of the IFC Review, your state-of-play guide to the most recent developments impacting the world’s leading financial centres.

As we approach the second half of 2021, the global economy is struggling to get back on its feet after the crushing body blow dealt by COVID-19. Aside from the pandemic, we are facing immense geo-political change: an economic backlash against China; a new era of Bidenomics in the US; an ever-fragile European Union; and a post-Brexit Britain aiming to maintain its position as a top 10 global economy.

IFCs have not remained unscathed but it’s safe to say that they appear to have survived better than many under the most demanding and challenging of circumstances. Not only do they continue to weather the pandemic, but they also continue to parry and, indeed, overcome the OECD’s increasing demands for ongoing regulatory alterations and adjustments in what is already a highly regulated environment.

This theme of rising to challenges and surviving despite adversity is reflected in our articles and commentary from expert practitioners, commentators and academics.

Our lead article examines the OECD’s tactics in enforcing MLI legislation which, the authors claim, is a coercion scheme designed to protect the organisation’s members’ tax systems to the detriment of smaller economies. Whilst in exploring IFCs’ expertise in dynamic capabilities, Oliver Cooper claims that IFCs are “collateral damage in positioning between different institutions within the EU to decide who controls wider tax policy”.

A definitive surviving factor for IFCs is that they continue to serve global markets rather than rely on a singular market. It is this flexibility and agility which Geoff Cook (see page 12) believes will allow Crown Dependencies and Overseas Territories to play a key role in supporting Global Britain post-Brexit.

IFCs are widely regarded as “hotbeds of innovation” and this is no more evident than in their embracing and development of digital technology. In their expert analysis on page 22, Simon Gray and Philip Treleaven explore how “the great digital disruption” is shaping the regulatory landscape.

Other topics covered in Section 1 include rehabilitating trusts; trusts vs foundations; data trusts and data governance; sustainable finance; the importance of family offices in these uncertain times; trends in international taxation in Latin America; and ethical wealth growth in Hong Kong and Singapore.

As well as providing Fact Files on the various jurisdictions, we also home in on the latest developments and innovations within specific jurisdictions: such as the passage of the Digital Assets and Registered Exchanges Act in the Bahamas, plus an in-depth analysis by Sir Trevor Carmichael Q.C. defining why Barbados continues to be an exemplary international business model; the launch of the BCSDI Custodian Trust Services Inc. in Barbados; key legislative amendments in Bermuda; the success of the Bermuda Stock Exchange which celebrates its 50^th anniversary this year; BVI’s plans for Asia’s post-pandemic recovery; and a legislative overview of the Cayman Islands. European jurisdictions include Liechtenstein, Luxembourg and the Netherlands.

Moving forward, IFCs will undoubtedly face continued scrutiny, ongoing demands and confrontational challenges but they will survive by doing what they do best – providing innovation, stability, expertise and flexibility whilst continuing to adhere to a strict regulatory framework. IFC Review creates a detailed picture of where the industry currently stands and offers glimpses into the opportunities and challenges of the future – and we will continue to do so in the months and years to come.

Georgina Hatch

Consulting Editor