What future for offshore now?
Following the worldwide media frenzy over the disclosure of vast numbers of clients of Mossack Fonseca, questions are now being asked over the future of offshore activities. It is clear that, in many jurisdictions, something of a witch-hunt is being conducted against those who use offshore centres. Of course, there have, especially in the past, been instances of abuse by persons seeking to hide illegal money or those who wish to illegally evade their tax liabilities. That is the popular perception of “offshore”. Today, that perception is almost certainly wrong as many of those using offshore centres are using them in an entirely legitimate manner. In many jurisdictions (especially USA and EU countries), successive governments have introduced increasingly stringent legislation designed to deter and punish the use of offshore centres. For quite a few years now, many offshore centres have been actively trying to deter illicit business. This is achieved by toughening up the regulation of relevant businesses and the manner in which they accept clients and by exchanging ever more information with onshore jurisdictions. Following the recent Mossack affair, several major offshore centres have undertaken to compel the public disclosure of the beneficial ownership of offshore entities. Having started off as havens of privacy, offshore centres no longer provide that tradition of confidentiality and now afford their users far less privacy than can be found in major onshore jurisdictions. Some of the people working in the “offshore industry” now complain that they are subject to much stricter rules and disclosure requirements than apply “onshore”. This is perfectly true and is leading many intelligent people to question their existing structures and wonder whether they would not be better off moving from offshore to onshore.