WITH New Year's resolutions about tax planning fresh in mind - and cheques payable to the Inland Revenue Department gripped tightly in hand - now is a good time to find out more about offshore financial centres.
Selecting a tax haven is difficult at the best of times, but the proliferation of offshore jurisdictions and increasing competition among them has made the process even more confusing.
'Choosing the right location is often a subjective and personal process, and there is no single offshore centre that is all things to all people,' Paul Harris, a manager of Deloitte Touche Tohmatsu International's Jersey office, said.
It can be difficult to get private bankers to recommend individual jurisdictions because their business is often genuinely global. And the offshore centres themselves generally provide the same range of products.
As a result, potential clients face a bewildering array of offshore-banking sites and may feel they have little means by which to choose among the different locations.
Start by looking at your own needs. Is your aim to reduce tax liabilities, protect assets, seek confidentiality, avoid forced-heirship rules or something else entirely? Are your needs fairly simple, just to set up an offshore bank account or investment fund? Or are they more complicated, such as to set up an offshore company or trust to hold your assets? Armed with this clarity, a tax adviser or trust adviser might suggest one jurisdiction over another, but the distinctions between centres are likely to be rather fine.
For example, Deborah Annells, the director of international tax services at accounting firm Grant Thornton Byrne in Hong Kong, noted there were jurisdictions, such as the Cayman Islands, that charge no tax; others, such as Bermuda, that issue tax-exemption certificates; and still others, such as the British Virgin Islands, that do not tax international business companies.
