The history of “low tax jurisdictions”
As Belize attorneys our Belize law firm has dealt with the recent onslaught against “Tax Shelters” that has effected the Belize Offshore industry. Attorneys in Belize need to respond to these attacks since Belize is an ideal locale for offshore financial activities. The definition of a tax haven is internationally recognized (the OECD) as “…a country characterized by low or zero taxation, a lack of transparency and a refusal to provide information to foreign tax authorities.” Since many equate “tax haven” with “tax avoidance” a campaign was re-energized during the recession whilst ”high income” countries saw their financial system diminish. In fact, many first world analysts have held tax havens responsible for their role in the international crisis.The “funny” part is that these offshore havens were a invention of industrial countries, and are today more transparent, and in contrast, the biggest financial issues have been “onshore”.
Historical Foundation
The Jersey, Guernsey, and Channel Islands, physically closer to France than the UK, are remnants of King William II, who acquired the British Isles in 1066. Sizeable self-government and certain rights (tax and otherwise) were their “reward” for their loyalty to the UK Crown in 1204. They were labeled as “offshore”, i.e. not part of larger land areas. As such, it is a fact that the European nations that created the concept which has evened the playing field now require an excuse to contain and suppress world-wide efficiency. Delaware came into this area of finance after they realized the greater corporate registration revenues available by providing more flexible business laws. Delaware now calls itself a “Company Haven”, but as Shakespeare says a rose by any other name smells just as sweet. In addition, the European microcenters of Luxembourg, Liechtenstein, Monaco, Andorra, and larger Switzerland and Austria had already served cross border industrialists, nobles and intertwined sovereigns for very long time. Money was invested to comparable but more efficient centers like the Caymans, BVI and eventually Belize.
Many of the colonies that are “offshore” financial centers gained self-rule and then the industrial countries’ sources gave way to global scattering of income. More countries were involved and a “reason” needed to be created. The same way the 9/11 attacks provided America a highway to enact the Patriot Act and further civil liberty indiscretions, the financial crisis came as a miracle that could not be created had they tried.