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Offshore financial center
   In general, national financial institutions only in local currency deposit and loan
business, but after World War II, the world's financial institutions engage in
currency other than foreign currency deposits and loans, business gradually on the rise,
some of the country's financial institutions become the world currency
Centre for deposits and loans.
   Any country, region and city, where the main foreign currency transactions (or
savings and loan) subject to non-residents (Enterprise) for the trading partners, both
local banks or foreign banks formed by the banking system, can be known as offshore
financial Centre (offshore finance)
   In the Eurodollar market, for example, it is a very typical offshore financial center,
it is a free trade, free from control of the international financial markets. Offshore
financial business is primarily wholesale banking business, a large amount of deposits
and loans, trading partners are usually banks and multinational companies, their
business is usually the introduction of foreign capital, then capital loans to foreign
countries, the so-called two out. Individual investors can also invest through
   Strictly speaking, the offshore financial authorities of the country where that is not
subject to the control of the domestic banking law and the use of two sources of
borrowed funds abroad, to non-residents of foreign enterprises and institutions to
target foreign currency trading activities of financial intermediation, whether these
activities occurred within or outside. Such as the United States, international banking
facilities (IBF) and the Tokyo offshore financial markets business activities, are
Offshore Banking
   Also known as offshore offshore banking units, offshore financial center is located
in a bank or other financial organizations. Its business only with other units of foreign
banks or foreign enterprises, institutions contacts, but not allowed to operate in the
domestic market.
Offshore financial markets
   The development of offshore financial services began in the 20th century 60s. At
that time, a number of international banks in order to avoid the development of
domestic banking and financial intermediation constraints, beginning in particular
international financial center operates a currency other than currency Deposits.
70's, the offshore dollar-denominated deposits increased drastically.
80's, 随着 Tokyo offshore international banking facilities and financial
markets Jian Li, the country where the offshore financial Ye Wu Jiang currency also
came, except that the currency deposits and loans Zhezhong object is limited to
non-resident enterprises and individuals.
   The rapid development of offshore financial business is mainly due to: offshore
bank do not have to pay the reserve, its operating costs lower than the domestic banks,
offshore banks from interest rate cap constraints, that is their right to pay depositors
interest rates may be higher than the bank interest rates paid by domestic depositors,
but also to pay interest on demand deposits, offshore financial enjoy tax benefits.
   Offshore financial markets was the rapid development since the 70s, from London,
Paris, Frankfurt, ﹑ Zurich, Luxembourg and other European regions extended to
Singapore, Panama, the Bahamas, Nassau and other places. Since the 80s, but also in
New York, Tokyo and other places the emergence of new offshore financial center, to
the 90's, the offshore financial markets around the world.
Offshore financial markets generally, there are three types of
1. London type are "natural" market.
   London offshore market began in the late 50s, both as business banking, and
securities business. In addition to non-residents are allowed to operate freely in
foreign exchange, financial business, the absorption of deposits without paying the
required reserve. In the past, this type of market operation due to foreign exchange
control restrictions, but distinct from the domestic business. However, since October
1979 after the abolition of exchange controls on foreign exchange management and
financial business equal treatment of domestic financial services,
"offshore" is itself, there were variations, London offshore
market has actually become both domestic and offshore business
"outside-in-one" financial markets. Hong Kong since the
abolition of exchange controls in 1972 after the Asia-Pacific region has gradually
evolved into a major London-based offshore market.
2. New York, the key characteristic of type "artificial creation"
and "internal and external separation," and no securities trading.
   ?December 1981, the U.S. Federal Reserve agreed to establish international
banking facilities (also known as International Bank of convenience), the New York
rapid development of offshore financial services. Its main trading partners are
non-residents. Financing can only absorb foreign residents, foreign banks and deposit
companies, but operate international banking facilities, foreign banks are not limited
to, any U.S. depository institutions and foreign bank branches in the United States
may apply for start-up. Deposits are not in the United States banking regulations on
the deposit reserve ratio and ratio limits. Loans must be used outside the United States.
The "facilities" can be used include any currency, including U.S.
dollar denominated. The U.S. dollar is the most important international currency,
while the offshore market, the major trading currencies U.S. dollar in Europe, so the
offshore market in New York in national currency as a major trading currency. Open
in 1986 Tokyo offshore market is of this type.
3. Bahamas-based only and not substantive business account offshore financial center,
also known as "evasion-type" offshore market.
   These markets is actually a "tax evasion in Hong Kong."
Experienced in some countries or areas of financial services can avoid bank profit tax
and business tax, while the local branches of the cost and start-up costs than London
low, offshore financial markets have opened in these areas. Nassau, Bahrain, the
Cayman Islands and all other places is such a case.
Avoidance-based offshore financial centers, generally located in the scenic islands and
ports, political stability, tax incentives, not financial. This is the sense of what we
usually offshore financial center.
   In recent years, some of the world countries and regions such as Isle of Man (IOM)
and other legal means have to try to figure out and cultivate some of the special
economic zone relaxed to allow the international community in its territory, the
establishment of an international business company, the general said these areas as
offshore jurisdiction or as offshore jurisdictions. The so-called offshore companies in
offshore jurisdictions that generally refers to the establishment of limited liability
companies or international business companies. The relatively well-known offshore
financial centers Isle of Man, the Cayman Islands, the Bahamas, Bermuda, Samoa,
Anguilla Island, Caribbean Sea and so many offshore financial centers. Compared
with the general Ltd. offshore company, the main difference in the tax. With the
commonly used volume of business or the practice of tax profits, offshore
jurisdictions for offshore companies to charge the Government only the annual
management fee, in addition, will not levy any taxes. In addition to tax incentives,
almost 所有 offshore jurisdictions expressly provides: Gong Si's Gudong
information, Guquan ratio Shouyizhuangkuang Deng, enjoy the right to
confidentiality, such as shareholders Buyuan Yi, can not to make Pilu. Another
advantage is that almost all international banks have recognized these companies,
such as the United States, Chase Manhattan Bank, Hong Kong, HSBC, DBS Bank,
the French Credit Agricole Bank. "Offshore" companies can
open accounts in banks in the financial operation extremely easy.
   General kind of "offshore" regions and countries and
developed countries have good trade relations. Therefore, offshore company owned
by many large multinational companies and high worth individuals often use the
financial instruments.
The characteristics of offshore financial markets
(1) Business activities are rarely subject to regulatory control, simplicity, low tax or
tax-free, efficient;
(2) the offshore financial market currency is the foreign currency loans, borrowers are
free to choose currency. The relationship between the market borrowing of foreign
lenders and foreign borrowers relations, these lending relationships, involving almost
all countries of the world.
(3) offshore financial market interest rates in general, the deposit interest rate slightly
higher than the domestic financial market, interest rate is very small, more attractive
and competitive.