dodging currently costs £4,000,000,000 (4 bil- lion), which hits the UK taxpayer hard. The pub- lic want those involved caught and prosecuted. This prompted the government to pledge that it would further investigate any criminality, sham nominee directors or illegal dealings that the in- vestigation may uncloak. There has been a huge response surrounding offshore tax abuses and suspect transactions. Offshore financial activity is growing rapidly, and while much of it is car- ried out legally, it has raised fears that national
about the company and run companies on be- half of other people. Criminality occurs when a camouflage is created surrounding who is hold- ing the money, and when sham directors are re- cruited. The notion of sham directors began in the 1990s through what is now known as Sark Lark. The small Channel island of Sark, an in- famous British tax haven, was notorious in the 1990s, where money was given to mask real ownership of companies, allowing for tax eva- sion and concealing criminal activity. From a
protect their assets through intelligent investing and get the best return on their overseas private investments surely? Yes, but in a moral, trans- parent way.
It is legal to use offshore companies to pur- chase property or to exploit tax loopholes. Using a registered authentic company to organise your finances and see how you can make the most money is a perfectly legitimate, if not intelligent thing to do. However, problems arise when property deals are allowed to be made while the
investments are so popular. In short, tax reduction and confidentiality.
There are two reasons for why offshore
tax authorities are unable to accurately locate and govern the world’s wealthy. There are two reasons for why offshore in- vestments are so popular. In short, tax reduction and confidentiality. Certain countries offer low tax rates as an incentive for investment and busi- ness development. Ireland, for example, offers a low corporate tax rate and as a result compa- nies such as Google, Facebook and Amazon are based there. This increases employment and acts as an incentive for companies to invest in a country. Then there are the tax havens, locations such as The Bahamas, Geneva, The British Vir- gin Islands, Monaco, Nevis and Switzerland. These popular places can offer fairly safe in- vestment opportunities, with little or no forms of taxation. Though entirely legal, these havens remain outside UK tax jurisdiction. The offshore havens of these countries are well known to offer clienteles legal means to lessen or deplete international taxes. Confidentiality is also a huge bonus in offshore investment. This does not mean that the investors are criminal or dabbling in any illegitimate business. However, secrecy laws are a clear benefit when you are dealing with huge amounts of money. High-profile in- vestors don’t necessarily want the general pub- lic knowing their investment choices or business decisions.
However, legality comes into question when
offshore companies introduce nominee direc- tors. The concept of having a director of a com- pany who is a director in nothing but name is a cause for concern. They know little if anything
New European Economy
legal standpoint then, tax avoidance is legal, while tax evasion is not. The British Virgin Islands (BVI) is another
example of a current day tax haven. It is a sov- ereign state, located in the Caribbean, a British overseas territory with a landscape of tropical beaches and an absence of any major forms of taxation. When the phrase ‘offshore accounting’ is banded about images of a shady businessman in sunny climes doing dodgy deals often spring to mind. The media enjoys this stereotype, and frequently does nothing to dispel the untruths. While conducted in the right manner, with le- gitimate investment companies, offshore invest- ment is totally legal, and a great way to manage and invest large sums of money. It is when it is conducted in an underhand, secretive fashion that the legalities come into question. The British property ladder has been bur- dened with investors buying tax exempt pur- chases of UK property.
The Guardian
newspaper identifies that London has seen a 49% increase in property prices since 2009. Legal problems arise when offshore companies are used as a shield against the true identities be- hind evasive housing contracts in Britain, al- lowing individuals to buy up properties and remain nameless. This method of buying prop- erty, keeping transactions secret while taking complete advantage of the tax loopholes is under investigation. Britain's land registry controver- sially allows offshore property owners to keep their identities secret. What loopholes permit this to happen? Individuals should be allowed to
Nevis
Private investors can capitalize on their cor- porate and personal wealth management with Nevis. Nevis offers experienced regis- tered agents, attorneys, accountants, a range of banking institutions and asset man- agement companies to ensure you and your investments are in safe hands.
true identities behind the transactions are masked by using offshore companies. Exploita- tion and dishonesty somewhere along the line has allowed this to take place. Thankfully, it is clear that tax laws are tightening. Tax loopholes still exist, but not in the manner in which they used to. They are narrowing, and getting harder year on year to jump through. Tax evasion and abuse is being thoroughly investigated and bogus directors will be prose- cuted. Has this put a stop to the practice of sham directors? No, the practice is still a worldwide money-maker. However, the net is closing in and it is now more important than ever to know exactly where your money is being placed. Choosing the correct offshore investment com- pany is crucial to ensure that all aspects of your dealings are above board, that intelligent advice is being given and, essentially, an excellent ROI is received in an ethical and legal manner.
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