AHEAD OF THE CURVE
OIL OFFSHORE 2020 ANNUAL MARKET RESEARCH INDICATES GROWTH AND CONSOLIDATION FOR THE INDUSTRY
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ince 2010, Offshore Incorporations Limited (“OIL”) has conducted an annual “Offshore 2020” market research. This year over 300 global senior industry stakeholders took part, highlighting major trends and providing insights into the future state of the offshore industry. According to the research, the offshore industry continues to weather a political storm but the industry is emerging strongly, embracing better regulation, more transparency and a higher degree of professionalism. Research respondents say the fundamental role the offshore industry plays in the global financial supply chain is being better recognized. Nearly two thirds of the respondents expect FATCA already enacted in the US to be adopted universally across the OECD by 2017, and 88% anticipate automatic exchange of information between OECD nations within this timeframe. Whilst the debate over the critical balancing act between transparency and privacy with increased regulatory oversight will continue, to ensure that the benefits that offshore structures and financial services bring are not undermined in the process.
Increased regulatory and compliance standards have had a significant impact, with demand switching among jurisdictions. Businesses will gravitate to jurisdictions that are seen as more transparent, offering traditional offshore benefits combined with onshore credibility. As a result, the rise of mid-shore jurisdictions such as Hong Kong and Singapore is seen as inevitable, but the BVI and Cayman Islands retain their competitiveness due to mature infrastructure and efficiency for international holding company structures and fund formations.
Regulations having the most impact on the industry
Jurisdictions by importance
25%
FATCA
41%
Anguila Anti money laundering
8%
In the next 5 years 5%
AIFMD
1.8 2.0 1.6 1.7
Barbados
2.3 2.4
Bermuda
Today
9%
3.4 4.0
The BVI Source: OIL
Source: OIL
Exchange of Information
More Important 1.6 1.7
Bahamas
14%
In the next 5 years Today
Less Important
3.6 3.8
Cayman Islands
13%
2.5 2.6
Guernsey
7%
2.3 2.3
Isle of Man Beneficial ownership disclosure
15%
2.6 2.7
Jersey
3%
*Others include: Savings Directives, UCITS, EU Directives, BEPS, International Trust Act, KYC, bank account opening requirement and compliance, tax transparency initiatives, increased DTAs and accounting standardisation.
Crown Dependencies or British Overseas Territories
2.4 2.4
Cyprus
Europe Mid-Shore Asia
2.8 2.7
Ireland
3.2 3.1
Luxembourg Others
2.5 2.4
Malta
3.0 2.9
Netherlands
Regarding the potential OECD “regulatory end game”, are the following likely by 2017?
YES Publicly available beneficial ownership information The end of the use of offshore structures
What is the likely impact on clients’ business (Scale of 5, 5 being the most significant) Source: OIL
Average Rating
3.7
83%
7%
3.5
93% 57%
Automatic exchange of information between OECD nations
12% 35%
65% 29% 17%
January 2015 Edition
3.5
43% 88%
FATCA will be adopted universally across the OECD
Uniform global (non-tax) regulation such as licensing
NO
17%
A central (non-public) registry of beneficial ownership
Tax accounting standardisation
28
4.1 3.8
Hong Kong
71% 83%
3.4
Labuan
1.8 1.8 3.8 3.5
Singapore 1.6 1.7
Belize Cook Islands
1.4 1.5
Mauritius
2.2 2.2
New Zealand
2.1 2.0 1.9 2.1
Panama
3.4
Samoa
2.9
Seychelles
2.4 2.4
UAE
2.4 2.2
2.9
USA (Delaware)
1.9 1.9
2.9 2.8