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In 1997, approximately 60,000 offshore companies were incorporated in the various Caribbean centres. This figure is clouded by the fact that currently over 600,000 IBCs are incorporated in the British Virgin Islands (BVI) alone. In a recent survey it was estimated that up to 41% of the worlds offshore companies were incorporated in the BVI. The idea that in one month alone in the year of 2010, an astounding 4600 offshore companies were registered in Singapore, adds to the fact that going offshore is not simply a concept but rather a trend which is growing exponentially.

Offshore 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 an 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 insurance 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 is growing at a spectacular rate due to factors such as the European Monetary Union and the emergence of China and Brazil as economic powers. 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.

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