International Finance Centre
, Dublin, Ireland. Ireland is a top 5 Conduit OFC, the largest global tax haven, and the 3rd largest OFC shadow banking centre.
An Offshore Financial Centre
is defined as a country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy
. "Offshore" does not refer to the location of the OFC (many FSF
OFCs, such as Luxembourg and Hong Kong, are located "onshore"), but to the fact that the largest users of the OFC are nonresident (e.g. they are "offshore"). The IMF lists OFCs as a third class of financial centre
, with International Financial Centres (IFCs), and Regional Financial Centres (RFCs); there is overlap (e.g. Singapore is an RFC and an OFC).
During April–June 2000, the FSF
produced the first list of 42–46 OFCs using a qualitative approach. In April 2007, the IMF produced a revised quantitative-based list of 22 OFCs, and in June 2018, another revised quantitative-based list of 8 major OFCs, who are responsible for 85% of OFC financial flows (which includes, Ireland, the Caribbean, Luxembourg, Singapore, Hong Kong and the Netherlands). The removal of currency and capital controls, the early driver for the creation and use of many OFCs in the 1960s and 1970s, saw taxation and/or regulatory regimes become the main reasons for using OFCs from the 1980s. Progress from 2000 onwards from IMF
initiatives on common standards, regulatory compliance, and banking transparency, has significantly weakened the regulatory attraction of OFCs. Academics now consider the activities of OFCs to be synonymous with tax havens
, with a particular focus on corporate tax planning BEPS
tools, tax-neutral asset structuring vehicles, and shadow banking
. Read more...