Offshore Incorporation and Banking Aren’t Going Away Anytime Soon

Well, it looks like we’re going to experience the worst year in air travel in the recent past. This is bad for business in general, but it’s really bad for tourism.

A lack of tourism will effect some cities like Paris, San Francisco, and Niagara Falls in extraordinary ways, but the countries wherein these cities lie will have some ability to cope: be it federal subsidies, tax breaks, or emergency actions. What is the plan for The Cayman Islands (~70% of GDP dependent on tourism), The Bahamas (51% of GDP dependent on tourism), or The British Virgin Islands (45% of GDP dependent on tourism)? There is no recourse to combat this dramatic fall in income, and most of these countries and territories depend secondarily (or primarily) on offshore banking and incorporation as a source of revenue.

Simultaneously, we’ve seen pledges from these nations and territories to cut back on providing tax havens and money laundering centers:

A pledge by countries across the globe to combat financial corruption in 2016

A bunch of countries and territories get added to a “black list,” but who cares?

The concept of offshore banking and incorporation and the roles they play in sneaky CEOs getting big paydays, or founders exiting with all the cash, is more public than ever before. But that hasn’t stopped any savvy businessmen, because as I stated in my last op-ed, prosecution of white-collar crime is at an all-time low.

So, it’s hard for one to imagine that just as all of the tax haven’s of the world have their main sources of income snatched from them by a pandemic (this obviously goes for the Caribbean Islands, but should include Malta, Panama, Monaco, Nevada, etc) they’d destroy their other main source of income to please… who? The plebs, like me, who think it’s unfair? The Hollywood Elite who make a movie displaying their malfeasance? The journalists of the ICIJ?

The truth is, there’s almost nothing we can do at the moment — with a world entering recession and the offshore financial centers losing most of their income — to stop what has been a corporate and money laundering plague.

I am not pessimistic for the future in regard to fending off a truly nasty virus. But I’m not so sure we can extinguish offshore banking and incorporation. Ever.