Offshore vs Onshore. What’s the difference?
Money laundering is often conceptually linked with offshore, therefore the term “offshore†itself is worth discussion. This has already been discussed, indeed, however, new valuable information regarding this has recently emerged.
When talking about offshore and onshore companies, business, bank accounts, transactions, whatever else, for some reason “offshoreâ€often has a negative connotation, while “onshore†– a positive one. Does this have any grounds? Probably not, as the International Trade and Investment Organisation (ITIO) commissioned a report with quite a peculiar statement.
On May 1, 2007, the ITIO, which is a group of small countries with international financial centres across Europe, the Caribbean, Latin America, the Pacific and Asia. I, released a report entitled “Assessing the Playing Field“ stating that there is no big difference between offshore and onshore financial centres and disproving that offshore centres have weaker regulation standards than onshore ones. The report is based on an analysis of objective data compiled by the Organisation for Economic Cooperation and Development.
Based on the conclusions made in the report, ITIO Deputy Chair Malcolm Couch says that “it’s time to stop treating small countries with finance centres as different†adding that “big countries have no moral or legal edge over small onesâ€. He also suggests that â€large countries should stop stigmatising small and developing onesâ€, because there is no factual basis for that. According to Couch, both large and small countries should continue “to work on a cooperative and fair basis†as well as to participate in the OECD’s Global Tax Forum aimed at helping each other tackle tax evasion and criminal and terrorist financing.
The report suggests that large countries should open up access to the international network of double taxation treaties to small ones.