UK public registry of company ownership: secrecy jurisdiction reactions

Following the announcement of more details regarding the UK’s proposed public registry of beneficial ownership, David Cameron has recently written to the British Overseas Territories and Crown Dependencies on the issue.

Predictably, the reaction in both Cayman and Jersey – the two largest secrecy jurisdictions with links to the UK – has been negative.

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UK minister: Crown Dependencies and Overseas Territories “at the forefront” of global tax transparency

Media in Guernsey and Jersey have picked up on comments to Parliament made by Minister David Gauke on March 4th:

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Offshore provider: company registrations recovering from recession, total now 5% above 2008 levels

Offshore service provider Appleby yesterday published a report (pdf) with statistics on company registrations in Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey and Mauritius. All of these jurisdictions are in the top 20 on the 2013 Financial Secrecy Index except for the Isle of Man, ranked 34th.

“As the global economy appears to be stabilising, the company registration data reveals that levels of new company registrations in several jurisdictions have accelerated following a faltered growth pattern during the second half of 2012.”

“In the first half of 2013 there were 38,416 new offshore company incorporations in total. Although this represented a small decrease of 3% on the preceding six months in 2012, this was primarily due to a seasonal decline in incorporations in the British Virgin Islands (BVI), which has a disproportional effect on the total figures. Elsewhere, with growth at around 8-9%, most offshore jurisdictions are close to growth levels seen in onshore comparators the UK and Hong Kong. The UK is, as we would expect, leading this growth with an 11% increase.”

Looking a bit closer at the data in the report, it would have made sense to also compare numbers for the first half of 2013 with the same period in 2012 rather than just with the second half.  But this would have shown either a 9% fall year-on-year if BVI is included, or a slight fall of 0,3% if BVI is excluded, which doesn’t fit as well with the upbeat message an offshore service provider wants to be sending to its customer base.

In any case, despite its decline BVI “continues to dominate offshore new company registration activity by volume, and has consistently maintained a six-fold lead ahead of its nearest comparator, the Cayman Islands, and kept up a steady pace of circa 30,000 new companies registered each half year”.

The graph below shows the leading role of the British Virgin Islands among these 7 offshore markets.

New offshore company incorporations, first half 2013

company registrations


Source: based on data compiled by Appleby Global

The report also has statistics on the total number of companies registered in the seven jurisdictions: 674.385 as of the 1st half of 2013, a figure “5% larger than pre-recession 2008”.

Guernsey news: Plans to make Bitcoins, compliments from Shanghai and e-gaming regulation agreement with Malta

Alderney plan to lead the way on Bitcoins: “Plans to capitalise on virtual currency in Alderney could see the island become the world’s first jurisdiction to make bitcoins.

The idea of turning electronic cash into something tangible is still in the discussion stages.

The idea would see holders travel to the island to redeem the gold coins.

It would also provide a boost for the tourism industry too.”(sic) (via island of Alderney is part of the Bailiwick of Guernsey).

Island’s quality recognised by Shanghai vice mayor: Vice mayor of Shanghai Tu Guangshao “voiced his support for Guernsey as a well-regulated, compliant and cooperative international finance centre, recognising the island’s ‘great achievements in financial regulation and development’, during meetings in Shanghai last week with a delegation from Guernsey.” (via

Alderney and Malta sign e-gaming MoU “Alderney and Malta have signed a memorandum of understanding to bring the islands’ e-gaming regulators closer together. The islands have been in discussions for some time and said that the agreement would ‘set new standards in the setting up of business-friendly environments’.”

According to the Guernsey government website “E-gaming has been a major success story for Guernsey over recent years as, alongside the world-leading regulatory regime in the neighbouring island of Alderney, internet gambling and gaming businesses often choose to locate their servers in Guernsey. This provides an excellent package of benefits covering regulatory, technical and fiscal areas.”

In July 2012 the Guardian reported on the Alderney e-gaming industry, including a case in which an Alderney-registered online poker site was shut down for operating illegally in the US and left USD 350 million missing from player accounts.

Guernsey (population 65,000) is ranked 15th on the 2013 Financial Secrecy Index.

Overseas territories “not tax havens” press coverage sample

David Cameron’s comment that “I do not think it is fair any longer to refer to any of the overseas territories or Crown dependencies as tax havens” has gathered extensive coverage in secrecy jurisdiction press. Here are a few examples:

The Gibraltar Chronicle has a statement from the leaders of Overseas Territories – who were meeting in Gibraltar last week – saying: “Our territories are well regulated, independent financial services jurisdictions, and play an integral role in facilitating global business. We will continue to lead on meeting international standards of tax and transparency”

International Adviser says that Jersey, Guernsey and the Isle of Man “revel” in Cameron’s “not tax havens” comments.

Additionally, in Jersey Cameron’s comments were seen as an endorsement in the same week as a visit by the Lord Mayor of London, while in Guernsey the finance industry is preparing promotional events in Asia.

Cayman Finance said that “the transparency of the Cayman Islands financial services industry that had been built over the past four decades was finally being recognized.”

“…we believe it is about time Cayman starts to receive some credit,” said Gonzalo Jalles, CEO of Cayman Finance.

In Bermuda coverage picked up comments from Cameron during the parliamentary debate in which he said: “For many years, Luxembourg and Austria have held up progress on this issue. They have often tried to get round that by pointing to the overseas territories and Crown dependencies of the UK, which have now put their house in order, so we can turn back to Austria and Luxembourg.” The whole exchange can be found on the website; Cameron was responding to Jack Straw.

The Bermuda News website also linked back to comments by Finance Minister Bob Richards in June of 2013, saying that Overseas Territories are being used as “scapegoats and distractions from domestic policies and domestic policy failures.”

So far there seems to have been very limited coverage of Cameron’s comments in the UK and international press.

Guernsey: In your face, US regulators!

Via the Guernsey Finance press room, this is a good one:

Until July this year, US regulators including the Securities and Exchange Commission (SEC) were trying to repatriate assets from Guernsey to pay back creditors and investors in an allegedly fraudulent scheme with links to Madoff, Panama and the Bahamas.

However, local law firm Carey Olsen was after the same assets, with the competing goal of repatriating to BVI and Anguilla. And Carey Olsen are not shy about their home advantage:

” Some connections run deeper and communicate faster than technology ever will. At Carey Olsen we’re not just plugged in to our industry. We’re rooted to it and we branch out from it. It means we’re always ready to connect one client with another. Always ready to influence change. Yes, we’ve been linking in for a very long time.”

Following the ensuing “interpleader proceedings”, in what will most likely not go down as history’s most surprising ruling, the Guernsey Deputy Bailiff considered that the SEC had “failed to persuade the court”.

Celebrating this legal victory, Carey Olsen Advocate John Greenfield said the decision

“…sends a clear message that, no matter who you are, those wishing to become involved in proceedings should have a substantive interest in the subject matter and not simply seek to act as ‘cheerleader’ for an existing party to proceedings.”

“It was also an interesting reminder that parties having the benefit of foreign injunctions should take the necessary steps to obtain mirror orders in Guernsey should they wish to progress litigation efficiently here in the future.”

Or in other words: In your face, US regulators!

Guernsey: Gold sponsor of the 2013 International Taxation Conference in Mumbai, India

The Bailiwick of Guernsey – population 65.000 – is one of the Gold sponsors of the 19th International Taxation Conference, to be held December 5-7 in Mumbai, India. The conference is organized by the Foundation for International Taxation, and the theme this year is “International Tax and Treaty Conflicts”.

Other sponsors include KPMG and PWC (Patron sponsors), EY and Deloitte (Platinum).

The conference brochure (pdf) can be found here.

Selected topics on the programme include:

– Double Non-taxation: A Critical Evaluation

– Beneficial Ownership under Tax Treaties: Recent Developments

– Base Erosion and Profit Shifting (BEPS): An International Tax Issue

– International Tax Conflicts for Multinational Enterprises under BEPs

There will also be a number of panel discussions, including one titled “Should International Taxation be based on “Morality” or “ Legality””. Among the panelists is Jeffrey Owens, director of the Global Tax Policy Center in Vienna, and Senior Tax Policy Advisor to EY, specifically on Global Tax Policy and Controversy Practice.

On the taxation of Multinational Enterprises (MNEs), professor Owens thinks that:

“…there are certainly some MNEs that push the envelope on tax planning, but I think most, especially non-US MNEs, want to comply with both the spirit and letter of the law. We need changes in the international rules of the game, but more a repair than replace.”

and also that

“The real question should not be whether MNEs are paying their fair share of taxes, but whether they are complying with the laws and international rules put in place by the governments of the countries in which they operate.”

In sum, tax justice does not seem to be on the agenda of this conference.

Secrecy Jurisdiction News: August 11th 2013

Jersey: Court dismisses appeal for tax information from Norway. The information on a Norwegian citizen was requested as part of a criminal investigation; the Royal Court of Jersey rejected the request because the information could also have been used to assess his tax situation.

Guernsey: Finance Industry in costs row

The financial industry in Guernsey, annoyed that financial regulation costs are growing faster than those in competing jurisdictions Isle of Man and Jersey.

British Virgin Islands: Opposition politician calls for government to “divorce” PriceWaterhouseCoopers, citing conflicts of interest and a report which raised serious concerns about a PWC audit in Trinidad.