Traditionally, ‘offshore’ referred to lightly regulated and low tax jurisdictions, which were typically to be found amongst UK dependencies such as Jersey, Guernsey and the Isle of Man, former Caribbean colonies such as the Cayman Islands, the Bahamas, and the British Virgin Islands as well as Bermuda.

All had legal systems based on the English system yet had the autonomy to set their own regulatory standards, make their own laws and. most importantly, set their own tax rates.

For wealthy individuals and families, they offered low or zero tax rates on savings and complete privacy from their home tax authorities.

In recent years, much has changed. The confidentiality offered by offshore banks and trust companies drew suspicions that offshore jurisdictions were being used for tax evasion and money laundering. The major economies, through both the Organisation of Economic Commercial Development (OECD) and the European Union (EU), threatened to put offshore jurisdictions on a blacklist and ban their citizens and companies from using them.

Offshore financial centres were forced to introduce stringent anti-money laundering laws, allow foreign criminal investigation agencies and tax authorities some access to client identities and holdings and reform some of the more contrived aspects of their taxation regimes.

Consequently, many have turned their focus towards servicing the needs of businesses rather than wealthy individuals. In addition to the development of significant banking and investment funds businesses, the leading offshore centres can provide tax neutral partnership structures, conduits for tax-efficient investment into high tax markets, property holding structures, aircraft and ship financing structures, captive insurance schemes, intellectual property licensing companies, international trading and holding companies,

Getting the benefit of offshore jurisdictions is now much complicated than in the past, and professional advice much more important, but offshore centres continue to a play key role in the efficient structuring of international companies. However, the increasingly strict rules about holding assets offshore means that professional advice is crucial if you are to remain on the right side of the law.