Who’s evading whose taxes when everywhere is offshore to everywhere else?

This was first published in Issue 207, June 2010 of Offshore Investment magazine and is reproduced with their kind permission.

President Obama noted that a small, five-storey office building in the Cayman Islands capital George Town, Ugland House, is officially home to more than 18,000 companies, yet only 241 people work there. According to the President it was "either the biggest building in the world or the biggest tax scam in the world". Note the language: not tax avoidance, not tax planning, but tax scam.

In the last four decades we have witnessed an increase in freedom of movement for businesses, people, money and services, at the same time as warning signs have appeared that sovereign states are losing control over such movements. Unfortunately, the development of this new global economy has created the means and the cover to move illegally-obtained assets between states at great speed and without detection.