A tale about “non tax jurisdictions”

As a Belize attorney my Belize law firm has dealt with the recent onslaught against “Tax Havens” that has effected the Belize Offshore industry. Attorneys in Belize need to respond to these attacks since Belize is a chosen site for offshore financial activities. One definition of “tax shelter” can be found in the English Collins Dictionary as “…a country or state having a lower rate of taxation than elsewhere.”  Since many equate “tax haven” with “tax avoidance” a crusade was re-energized during the recent banking collapse whilst ”wealthy” countries saw their financial system contract. In fact, many first world politicos have held tax havens responsible for their role in the global calamity.The irony of it all is that these “low tax jurisdictions” were a invention of first world countries, and are today better regulated, and in comparison, the most significant problems have happened  “onshore”.

Historical Beginnings

The Channel Islands, Jersey and Guernsey, physically closer to France than England, are remnants of King William I, who acquired the England in 1066. A large amount of sovereignty and other rights (tax and otherwise) were their “reward” for their loyalty to the English sovereign in 1204. They were thus referred to as “offshore”, i.e. out of the country. So it was Europe that created the idea which has leveled the playing field now require an excuse to contain and suppress global efficiency. Delaware became interested after they realized the increased money available by providing more flexible corporate laws. Delaware now calls itself a “Company Haven”, but as they say a rose by any other name smells just as sweet. In tandem”, the European microcenters of Luxembourg and Liechtenstein had already served cross border industrialists, nobles and intertwined sovereigns for very long time. Business started going to related but more efficient centers like Panama, Bahamas and eventually Belize.

These former colonies obtained self government and then the first world countries’ sources gave way to global scattering of income. More countries were involved and a “reason” needed to be created. The same way the 9/11 attacks provided America a highway to pass the Patriot Act and further civil liberty indiscretions, the recent financial crisis came as a miracle that could not be created had they tried.