New anti-offshore legislation, or the causes of the outflow of assets

Offshore jurisdictions are used by the business, not only for the optimization of the taxable base, but also for ensuring the safety and legal protection of the assets. However, the existing international practice poses new challenges and objectives for the business. Some of them are associated with the introduction of the anti-offshore legislation on the territory of many countries.

Anti-offshore legislation

The provisions of the law, which are aimed at deoffshorization of the economy, start to operate in practice. Entrepreneurs and businessmen are in search of new solutions. A real change of tax residence and transfer of assets into a tax-free haven are one of the most effective and use-proven tools for business.

The provisions, which are imposed by the international legal acts, provide for a number of the procedures aimed at deoffshorization of the economy of the countries, in particular:

  • necessity of providing the detailed information and data;
  • improved system of administration;
  • necessity of legalization and translation of the primary corporate documents into the state language;
  • compliance of the business and fiscal accounting with the new requirements and etc.

Toughening of the requirements: what is the way out

The experts and analysts say that the actual change of the tax jurisdiction remains the most effective and use-proven way to save the financial assets. Many entrepreneurs understand that the change of the tax residence is the only way to ensure the confidentiality of information and the foreign structure of an international company without tax consequences. For this reason, there is an outflow of the capitals into the low-tax jurisdictions.

How to change the status of a tax resident

The current legislation of the most countries provides that a tax resident lose its status in the case of being outside the state for a certain time period, for example 183 days. In some cases the requirements on the number of days are bigger. Besides there are also some additional regulations which differ depending on the state. In cases when a physical person loses the status of a tax resident, the rules of the law, which regulate the activity of the foreign companies, are not applied on him.

How to choose the most appropriate jurisdiction

Practice shows that the private persons, when selecting a tax-free jurisdiction, often make a choice in favour of Cyprus, Switzerland, Malta, Monaco, the UAE and the UK. Several criteria can be singled out among the key factors influencing the choice of the jurisdiction:

  • tax rate on the incomes of physical persons;
  • availability of the opportunity of the international tax planning (international agreements and etc.).


In the UK, the certain categories of persons are liable only to the taxes on incomes, which are transferred into the country. The Swiss government admits the possibility of contractual tax relationships with the resident. In this case, the tax rate can depend on many factors (number of created jobs, the amount of the investments into the national economy and etc.). There is no tax on the most types of incomes for the UAE residents.

Low-tax jurisdictions: the possible prospects

The low-tax jurisdictions have always been a double-edged sword. The decision to change the tax status and to withdraw the financial assets can be both the solution to all the problems, and the cause of the new. It should be noted that the modern states work actively in order to identify the jurisdictions where there is an outflow of the financial assets, and the lists of persons who withdraw the assets outside the country.

The accounts in the offshore banking establishments enable to manage the financial assets profitably and what is most important – efficiently, investing them or depositing for drawing the interests. Such accounts remain an effective tool for the secrecy of information, both from the fiscal authorities and from the ill-wishers. The current situation does not suit the countries with a high tax burden, what has led to the fight against offshore jurisdictions.

Despite the global nature of the measures aimed at deoffshorization of the global economy, the bank accounts in the offshore banks are the main instrument for withdrawal and protection of the asset.

Deoffshorization: state initiative

Powerful nations of our planet are directly interested in identifying the unfair taxpayers and returning the financial assets. But nevertheless, there is a number of objective difficulties and obstacles for implementation all these goals. One of the main problems of such states is the lack of possibility to oblige all the world's banking institutions to provide the necessary information about their clients. Accordingly, it will be difficult to identify all the residents, who own the foreign accounts.


The international analysts and experts recommend to approach even more thoroughly to the choice of the solutions for tax optimization. Despite all the recent changes, the offshore bank accounts and jurisdictions are in high demand in the international arena. An offshore account is one of the most effective methods to preserve the confidentiality of the information.

If you still have questions regarding the possibilities of the offshore jurisdictions and foreign bank accounts, use the feedback form and get an advice.

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