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The VI knows it’s been beaten by the USA – so it’s turning to the UAE instead

The US Foreign Accounts Tax Compliance Act is scaring tax havens around the world, and rightly so. For all practical purposes, the illicit tax haven sector is closed to the vast majority of US business now. But not to be outdone places like the British Virgin Islands are seeking business elsewhere, according to Richard Murphy of Tax Research UK.Photo: bviifc.gov.vg
By Richard Murphy, Tax Research UK

The US Foreign Accounts Tax Compliance Act is scaring tax havens around the world, and rightly so. For all practical purposes, the illicit tax haven sector is closed to the vast majority of US business now. But not to be outdone places like the British Virgin Islands are seeking business elsewhere.

 As UAE’s The National reports: The British Virgin Islands financial services sector is switching tack to focus on the Arabian Gulf, as tax havens come under renewed pressure from the United States.

The UAE presents numerous opportunities for the Caribbean destination to develop its financial industry, said Lorna Smith, the chairman of the BVI financial services business development committee and wife of the islands’ premier, who led a delegation that last week met government officials in the Emirates.

“We’re certainly very impressed with the leadership in financial services that the UAE has shown,” she said. “We’re excited at the prospect that later this year Abu Dhabi will have opened its own financial zone.”

The BVI is seeking to attract firms looking towards cross-border financing, private banking, asset management and estate planning.

You bet it is. Tax may not be the focus here, but defying regulation is and that’s because BVI is much more than a low tax jurisdiction, it’s a secrecy jurisdiction. Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain.

That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate the use of this regulation  secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so. And that’s the ongoing problem that everyone, including the UAE, faces.

6 Responses to “The VI knows it’s been beaten by the USA – so it’s turning to the UAE instead”

  • ? (26/03/2013, 11:20) Like (1) Dislike (1) Reply
    What utter nonsense these people are writing about us!
  • vince (26/03/2013, 11:33) Like (1) Dislike (0) Reply
    Hope all deeds million consultants Robert and NDP got around the place tis worth dem salt & can response to such damaging article!!
  • Liat 521 (26/03/2013, 13:04) Like (1) Dislike (0) Reply
    You got the UK hitting us on one side and the USA on the next what a thing to tell the king!
  • x factor (26/03/2013, 15:27) Like (1) Dislike (0) Reply
    Poor we the big boys are out to take away our bread and butter!!!
  • @@@@@ (26/03/2013, 18:29) Like (2) Dislike (1) Reply
    wher are the NDP spin doctors?.......welcome to wonderland

  • taxman (27/03/2013, 14:44) Like (2) Dislike (0) Reply
    Good for VINO for running this piece.
    It's about time we BVIslanders faced up to the fact that our financial service sector is designed purely to help people hide their money from their home jurisdictions. That means all kinds of money can be hidden away here from dirty narco dollars to money stolen by dictators, to rich people who don't want to pay a fair share to their own country.
    All the debt these countries have - these giant deficits - could be paid off if they were able to tax the people making real money in their country. But they can't because we design laws to subvert their tax system.
    Meanwhile, healthcare, the elderly, the poor of these countries can't get services and things they need - because the money aint there. It's hiding down here.


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