 SUMMARY
OF OUR SERVICES
Consultation
- Consultation regarding formation, annual maintenance,
tax planning and various offshore soultions and
the selection of the proper jurisdiction.
Company formation and related services
- Company formation in all major financial service
centres. In order to provide fast solutions to
our clients we maintain ready made companies on
our shelf.
- Preparation of memorandum and articles of association
- Formation of trusts and companies
- Provision of registered agent and registered
address
- Provision of nominee directors and shareholders
- Bank account opening and management
- Execution of commercial transactions according
to the instructions of our clients
- Services related to acreditives
- Preparation of invoices for our client companies
- Revision of contracts and execution
- Mail forwarding telephone and fax message forwarding
service
- Translation service
Accounting services
- Complience with statutory accounting requirements
- Auditing
- VAT registration and related consultancy
International banking services
- Close working relationship with a number of international
banks
- Opening corporate private and foundational account
in any convertible currency
- First class banking services
Our international partner banks provide a broad
range of services including:
- current accounts
- deposit accounts
- bonds
- portfolio management
- loans and mortgages (subject to the status of
the financial institution)
- financing commercial transactions (subject to
the status of the financial institution)
- acreditives
- clearing
- international swift services
- various credit cards
- on-line bank services
Crystal WorldWide may assist only its own clients
in setting up corporate accounts.
A quarter of a century ago, there was only a handful
of offshore centres, and to many, their use was surrounded
in "mystique". Also, there were only a few professionals
specialising in offshore practice and those that
did, typically made use of only one or two jurisdictions.
Over the last twenty years, startling advances in
technology and the telecommunications revolution,
have made it easier to access offshore facilities
- so much so, that today's offshore industry has
developed in to a major global business, spanning
all quarters of the world, involving, in one way
or another, approximately half of the worlds financial
transactions by value. Consequently, International
Financial Services Centres are no longer surrounded
by the "mystique" of twenty years ago. They are used
globally, twenty-four hours a day, each and every
day, as an integral and important part of the world's
financial system.
THE
FUTURE OF THE OFFSHORE INDUSTRY
Over the next few years, there will be major changes
in world geopolitics. The current world population
is increasing by 90 million a year - 15 million of
who are born in China. Presently, thirty per cent
of the world's working population is unemployed.
Additionally, the world's population is increasingly
expecting higher standards of living and improved
work opportunities. These radically changing patterns
in expectations, population and wealth will continue
to create political and economic instabilities. Governments
in both the developed and the developing world will
have no option but to continue to levy high taxes
to meet these expectations and the associated costs
of providing new and improved infrastructure. Thus,
one does not need a "crystal ball" to see clearly
that the offshore industry will continue with its
rapid development and growth.
The users of International Financial Services Centres
are becoming increasingly demanding. They expect
high quality service at a reasonable cost, and access
to sophisticated investment services - as well as
confidentiality.
Tomorrow's offshore users will be looking for centres
that can compete with today's onshore financial centres
in the following areas:
- Regulation
- Communications
- Specialisation
- Credibility
- Infrastructure
- Stability
- Expertise
- Flexibility
DEMAND
Over the last twenty years increasing client demand
for offshore facilities has not only resulted in
an ever-growing number of International Financial
Services Centres ("IFSC") but also in more competition
amongst the existing centres.
The political and economic catalysts that influenced
the growth of the offshore industry in the eighties
and nineties will continue to influence growth in
the next two decades.
These catalysts are:
- Political and economic instability
- Market globalization and deregulation
- The internationalisation of business
- The lifting of trade barriers
- Trends towards steady global economic growth
- A global relaxation of foreign exchange controls
In addition to political and economic catalysts,
there are also global tax related catalysts that
continue to influence the growth of the offshore
industry.
These include:
- High tax regimes
- More effective tax recovery
- The opportunities of utilising double tax treaties
OFFSHORE
COMPANY STATISTICS
In 1997, some 60,000 or so offshore companies were
incorporated in the various Caribbean centres. The
most popular jurisdiction is the BVI whose registrar
has incorporated approximately 200,000 IBC companies
in the last ten years. Some 35,000 IBCs were incorporated
there last year. It is estimated that 15,000 companies
a year are incorporated in Hong Kong for offshore
purposes and another 50,000 or so in the other offshore
jurisdictions.
This means that the total number of companies formed
for offshore purposes exceeds 130,000 per annum.
The British Virgin Islands are not shown on these
charts, but as of the end of 1998 there are over
200,000 companies incorporated there!
OFSHORE FACILITIES FOR INDIVIDUALS AND CORPORATIONS
What are the profiles of the users of International
Financial Services Centre facilities?
Individual Users:
- High Net Worth Individuals
- Immigrants and Expatriates
Corporate Users:
- Financial Institutions
- Large Companies
- Specialist Corporate Users
- Owner Managed Businesses
INDIVIDUAL
USERS
High Net-Worth Individuals
Traditionally high net-worth individuals originated
from Europe and North America. Today, substantial
new wealth is being generated in Asia and South America.
This trend is likely to continue well in to the
next century.
Today's high net-worth individuals are much more
demanding and financially sophisticated than those
of a decade ago.
Immigrants and Expatriates
Immigrants and expatriates are another important
category of individuals using IFSC facilities.
Immigrants are individuals who have moved from
one country to another.
Expatriates are individuals living away from their
home countries, and who express a desire to return
there some time in the future.
Immigrants and expatriates are motivated to move
away from their home countries by factors such as:
- The desire to escape from social, political,
economic or other forms of instability
- The search for a better quality of life
- Foreign employment
- The pursuit of business opportunities
- Tax efficiency
By way of example, there are estimated to be over
four million British citizens resident outside the
United Kingdom. Furthermore, between fifty and one
hundred thousand British citizens go abroad to work
every year.
The flow of immigrants and expatriates continues
to change with new groups becoming more significant
in relation to the numbers flowing to and from Western
Europe. For example, over the last few years nearly
12,000 Russians have established residence in Cyprus.
The numbers of expatriates and immigrants are certain
to increase, as living or working abroad becomes
less difficult - and, as business becomes more international
and less constrained by national boundaries.
CORPORATE
USERS
Corporate users fall under four broad headings:
- Financial Institutions
- Large Companies
- Specialist Corporate Users
- Owner Managed Businesses
Financial Institutions
As we move into the 21st Century, there will be
major developments in the use of International Financial
Services Centres by financial institutions. By way
of example we will consider the insurance, fund management,
pension and private banking sectors.
Insurance Companies
Life and composite insurance companies are increasingly
making extensive use of IFSC facilities. A significant
opportunity has recently arisen in this area resulting
from the completion of the European Union's single
market in insurance. Under the European Union's Third
Life Directive - life assurance companies established
in one Member State are able to sell products to
clients in other European Union countries.
Fund Management
With the diversity and range of global investment
products, there has been an ever-increasing growth
of funds. The growth in offshore funds will continue
as cross-border investment activity, due to factors
such as European Monetary Union and the emergence
of China and Brazil as economic powers, is growing
at a spectacular rate. The capital base of offshore
funds is now increasing at twice the rate of US domestic
funds, and this has attracted an increasing number
of US fund managers to the market.
The dismantling of the Eastern Block and the easing
of international trade barriers have opened a wide
range of new markets. Such opportunities have led
financial institutions to develop funds, such as:
The India Fund, the Chile Fund, the Israel Fund and
the Vietnam Fund - all of which have been launched
through offshore vehicles.
The growth in offshore mutual funds has encouraged
centres to develop their infrastructure and regulatory
systems in line with internationally accepted standards.
It has also led to the need for specialist professional
expertise in such centres. This includes not just
the provision of expert advice but also full administrative
services, including global custody.
Pension Provision
It is predicted that a pan European market for
the provision of pension will emerge that will present
opportunities for centres such as Ireland and Luxembourg.
Private Banking
Major international banks have long recognised
the attractions in establishing private banking operations
in International Financial Services Centres.
Large
Companies
Other major corporate users of IFSC's are multinational
companies.
For many years, multinational companies have used
centres to establish companies for their international
business activities. The main areas that these companies
utilise International Financial Services Centres
are shown here:
- Establishing holding companies
- Structuring foreign direct investment
- Owning intellectual property rights
- Setting up headquarters companies
- Establishing physical operations
- Capital raising exercises
- Obtaining stock market listings
- Managing treasury operations
- As domiciles for captive insurance companies
Specialist
Corporate Users
Examples of Specialist Corporate Users include
shipping and aviation companies. Since the 1920s,
shipping companies have been using offshore shipping
centres for ship ownership, registration and management.
Open registries, are one of the oldest features of
this industry. There are three types of open register:
- Independent Registers
- Dependency Registers
- Offshore Register
An "independent register" is one run by sovereign
states. The Panamanian Register is an example of
an independent register and since the 1920s, Panama
has been one of the most popular locations for the
registration of US owned vessels.
Liberia is another well-known independent register
since the establishment of its registry in 1949.
The Cayman Islands and other British ports of registry
are examples of dependency registries as their basic
law and standards are based on those of the United
Kingdom.
Countries that wish to provide a special register
offering a more liberal operating environment establish
offshore registers, such as the Norwegian International
Register.
Over the last seven years, there has been a dramatic
recovery in the worldwide shipping industry and several
offshore centres have been offering attractive incentives
to secure this lucrative business.
There is an active offshore market for offshore
aircraft registration. The most active centres include
Aruba and the Seychelles.
Owner-Managed
Businesses
Much of what has been said about multinational
users of international financial services centres
applies equally to owner-managed businesses. The
profiles of these users incorporate every aspect
of international business, including manufacturing,
distribution and the service industries.
As owner-managed businesses become increasingly
involved with international business, they are responsible
for the establishment of a growing number of offshore
structures, in both treaty and non-treaty jurisdictions.
This trend will continue and owner-managed businesses
will continue to account for the majority of new
offshore structures.
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