Corb7 Blog

by Jeff Corbett

While reviewing some old files we came across the following article which appeared in Forbes Magazine back in April of 2009. It was a commentary authored by a well-regarded international attorney based in the Cayman Islands. We bring it to your attention because with the push by virtually every major nation to increase their tax base it seems more relevant than ever. Below are a few major points suggested by the author and a link to the entire work. We hope you enjoy and find it as well written as we did.

Forbes Magazine Commentary entitled:

“A Healthy Economy Needs Offshore Financial Centers” written by Charles Jennings in April of 2009

Salient Points:

• Bashing offshore banking is just a convenient smokescreen for the shortcomings of “onshore” oversight
• The nature of business undertaken offshore is easily misrepresented, too. For example, my firm’s office building, Ugland House in George Town, Grand Cayman, has drawn attention because it provides registered office services to over 18,000 companies. U.S. President Barack Obama, during his election campaign, referred to Ugland House as “either the biggest building or the biggest tax scam in the world.” This elicited cheers from the audience but overlooked the fact that there are many such places all over the world, including in onshore jurisdictions. Ugland House simply provides companies with a registered office address as required by local law, a law similar to that of every U.S. state. A single building in Delaware, for example, provides a registered office for over 200,000 companies.
• While overheated political rhetoric drowns out reasoned discussions on the uses of offshore centers, those who understand international economics value the role that they play. The Cayman Islands enable U.S. corporations to access global markets more competitively; enable banks to make secured loans to finance power projects in developing countries; and help hedge fund managers to attract international investors. These transactions support thousands of jobs and ultimately generate taxable business activities in the United States The fact that Cayman is tax-neutral does not affect the obligation of the stakeholders in these transactions to pay tax in their home jurisdictions.

Charles Jennings is joint managing partner of Maples and Calder, an international law firm headquartered in the Cayman Islands
http://tinyurl.com/alxay2f

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