My previously article “The Isle of Man New Manx Vehicle – simple, more flexible, offshore and part of the EU for VAT purposes” provided an overview of the Isle of Man. It highlighted the attributes of the jurisdiction for internet businesses and the introduction of the “New Manx Vehicle” corporate structure (“NMV”). The NMV was designed to compete more effectively with the corporate structure offered by the British Virgin Islands. In 2004, the BVI incorporated 60,000 companies and the Isle of Man just 2,593. The NMV will be available for incorporation from the 1st November 2006. Apparently, there is significant interest in the NMV. A ballott is being conducted to award the honour of being the first NMV incorporated.
Read MoreArchive for ‘Specialist financial centres’
Dubai is spending £140bn to transform itself into a capitalist powerhouse. The strategy being pursued in Dubai is unparalleled in history – a integrated and focussed strategy with unparalleled resources to make it happen. Dubai can build the hard infrastructure, but will the will the people, industries and businesses come? The comprehensive approach may deliver.
Read MoreWhat strategies do countries need to adopt to enjoy higher levels of consumption and retirement in one generation? What short-term sacrifices would each citizen need to make? Which countries have leadship that could formulate and implement the required changes? Would the citizens tolerate the short-term sacrifices?
Read More3 September 2006 Category: Declining markets, Economic development, Specialist financial centres, The rise of Asia 2 Comments 
Striking a balance between consumer protection, compliance costs and maintaining an effective market to raise capital for companies is very difficult. The following two articles suggest that the balance is skewed heavily toward consumer protection to the detriment of companies. Companies are simply moving to new markets where capital is easier to raise and costs are lower. If the balance is not right, the migration of companies will result in lost jobs and lost tax revenue to other financial centres.
Read MoreFriday, August 11, 2006 ~ 8:34 a.m., Dan Mitchell Wrote:Article explains the valuable role of tax competition. Western European politicians hate tax competition, and an article on the Globalpolitician.com website provides an excellent explanation: The Flat Tax Revolution in Eastern Europe presents a challenge to Western Europe, as companies are bound to move to neighboring states to avoid paying the near-confiscatory taxation (especially when you combine the income tax with corporate, capital gains and dividend taxes) levied in the "Old Europe" to support the Welfare State system. Furthermore, whereas hiring an employee in the Old Europe more closely resembles a Catholic wedding, where no divorce is possible except in the most ... Read More
Markets of buyers and sellers will come “full circle”. Thousands of years ago, “transactions” between buyers and sellers were negotiated “under a tree” and face to face. As markets became larger and global, industry constructed proprietary and closed systems to match buyers and sellers. In an era of the internet, much of this infrastructure is redundant. A global internet displaces regional and proprietary communications systems. The internet will significantly impact many industries. We are likely to return to negotiating “under a digital tree”. The internet and the emerging “semantic” web will bring the people together in the global market place.
Read More30 July 2006 Category: A Personal Central Brain, Capital allocation and remote services, Economic development, Equity Market 3.0, Health 3.0 National industry and patient medical record collaboration, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks No Comments
The key reasons that Europe and other regional economies have not developed a “Silicon valley” is not cultural and not lack of capital. There are enough entrepreneurs and the capital will mobilise. There needs to be predictable risk for involvement in early stage, greater transparency that reduce the costs of involvement and a significant reduction in the time/cost to find opportunities. Entrepreneurs and investors need to know who to call. The recipients of those calls need to be willing to get involved.
Is there a way to achieve transparency, without waiting for decades to pass and relationships to form in the conventional way? There must be a role for an online social network to assist each regional economy, company, advisers and investors with sincere early stage aspirations.
Read More“The Semantic Web (or Web 3.0) promises to organize the world’s information in a dramatically more logical way than Google can ever achieve with their current engine design.” The lack of metadata around information and closed information systems ensure financial markets remain a highly profitable industry. In Web 2.0, the information could be organised into structured databases from a single location made available over the internet. Web 3.0 must still be organised, but intelligent distributed agents could answer your question – “Which corporate adviser should I use to list my Web 3.0 company in Bermuda?” and “What are my chances of getting liquidity?”. It will be very interesting to see what type of answers Web 3.0 gives us?
Read More5 July 2006 Category: Boom then depression by 2012, Capital allocation and remote services, Central Brain assembly, Central Brain building blocks, Economic development, Equity Market 3.0, Industry collaboration (Central Brain), Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks No Comments
Shareholders may sacrifice $2.50 for every dollar they pay in taxation. Tax competition may encourage lower levels of global taxation. Structural changes could include simpler systems and an alignment of income and corporate tax rates. Of equal importance will be how government spends every dollar it receives. Some government are better than others in balancing social needs, long term infrastructure investments and immediate needs of business and tax payers. Government’s may not receive $1 of value for each dollar they spend. Whoever receives the dollar, it must be spent wisely for the greatest social or economic benefit in a mix endorsed by the community.
Read More1 July 2006 Category: Economic development, Specialist financial centres No Comments
The United States also driving companies away from their home market. Sarbanes-Oxley Act, increased regulation and complexity have increased the cost of raising capital and the risk of non-compliance. Offshore centres are attracting companies away from the United States. “23 of the 24 firms recently looking to raise more than a billion dollars in capital chose to list overseas rather than in the U.S.”
Read More“Low-tax jurisdictions play a valuable role in the global economy. Economic research indicates that so-called tax havens provide a tax-efficient platform for cross-border investments, help boost saving and investment, and thus increase global economic growth. Tax havens also encourage good policy in non-haven countries … The United States is the world’s largest beneficiary of tax havens and tax competition, both because the U.S. is a tax haven for foreigners and because tax havens facilitate the flow of capital to the American economy. “
Read More22 June 2006 Category: Capital allocation and remote services, Declining markets, Economic development, Specialist financial centres No Comments
“A true sea change is taking place in the capital markets industry worldwide. Driven by sociological, regulatory and technological developments, this wave will completely alter the face of the industry and the roles of current market participants over the next 10 years.”: Bearingpoint. Stock exchanges will move beyond order execution, to providing investment banking services and enhanced clearing and settlement. Smaller firms will follow Google’s IPO example and approach the public directly rather than through intermediaries.
Read More20 June 2006 Category: Capital allocation and remote services, Digital Ecosystems, Economic development, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 Intellectual property vs. Web 3.0 Community knowledge, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks 1 Comment
The BVI has incorporated over 700,000 companies, which by some estimates represents approximately 40% of companies registered in “offshore” jurisdictions. It has achieved its leading position by offering a specific mix of corporate law, investor protection, simplicity and privacy that others have since copied. The BVI has unique attributes that mean it is always considered as a place to incorporate. It has a cost-effective regime that has been recognised by the British government, the International Monetary Fund, the Organisation for Economic Cooperation and Development (OECD) as being compliant with the relevant international standards. Although, these same organisations also demonise offshore jurisdictions to discourage their use and protect domestic tax bases. Eleven BVI companies are listed on the the AIM stock exchange including an E-Gaming company.
Read More14 June 2006 Category: Central Brain assembly, Economic development, Equity Market 3.0, Specialist financial centres No Comments
The internet would appear to facilitate greater participation in the “listed company” market by the offshore stock exchanges. Offshore centres can list companies at a fraction of the cost of onshore exchanges. Onshore equity markets are expensive and can only be used by large companies. Does the current standard of compliance and regulation mean that small companies can not get capital for growth so that they become large? What does society gain from ensuring effective capital allocation to early stage companies? In the internet era, the offshore stock exchange may ultimately have a greater role.
Read MoreApproximately, 33-40% of the worlds financial assets and 50% of financial market transactions occur in offshore jurisdictions. In recent years, onshore countries have collaborated to stamp out “harmful tax competition”. The offshore jurisdictions are, and will remain, a critical part of the financial system. The internet and standardisation of offshore “products” has made offshore accessible to all. The onshore economies may continue “enforce” existing laws which seek to tax residents on world wide income. They may engage in “tax competition” or restructure misunderstood and unworkable tax systems. Whatever happens, the internet is likely to play a significant role in facilitating change.
Read MoreOn the 1st April 2006, the World Bank released a policy paper titled "Promoting access to primary equity markets : a legal and regulatory approach". The report is available from here. "Abstract: This paper examines legal and regulatory measures that can be taken to promote access to the primary market in emerging market economies. While capital market development depends on many factors including, primarily, a favorable macroeconomic environment, an appropriately designed and effective legal and regulatory framework can help to encourage market growth and to increase access to finance for all companies, including small- and medium-sized enterprises. In this paper we identify the basic necessities that underpin a regulatory regime that ... Read More
“Power will shift from the traders who have benefited from merely facilitating transactions to the buyers and sellers who take positions on either end of the trade, and that which is most highly prized in financial markets – the ability to create value – is likely to experience a renaissance as transformational as anything the industry has ever witnessed.” – IBM report. The opportunity for online social networks in financial markets is becoming clear.
Read More17 April 2006 Category: Boom then depression by 2012, Capital allocation and remote services, Economic development, Equity Market 3.0, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 Intellectual property vs. Web 3.0 Community knowledge, Web 1.0 proprietary hierarchies vs. Web 3.0 community networks 2 Comments
The McKinsey Global Institute (MGI) examined the financial assets of more than 100 countries since 1980. The result is a comprehensive profile of the global capital market (GCM) and an in-depth analysis of its evolution across geographies and asset classes.
Read MoreThe Government of Malta has announced framework discussions with Tecom Investments of Dubai on the setting up a new ‘SmartCity@Malta’. The Government of Malta has agreed to invest the land into the project whilst Tecom is expected to undertake an investment of approximately US$300 million over the coming 8 years. The first deliverables from this project are expected by 2008. This is a very exciting development. It may establish a cluster of IT companies in the EU, just like Dubai Internet City has done for the Middle East. It is also a visible sign to Middle East economies to establish new sectors and reduce their dependence on dwindling oil reserves.
Read More25 February 2006 Category: Economic development, Specialist financial centres No Comments
Offshore financial centres had a reputation for being havens of criminal activity. The following five year old articles show this reputation is undeserved.They suggest that the “persecution of tax havens is not the fight against money laundering but the fight against low taxes”. The persecution of “tax havens” was simply an instrument of the nation state to protect domestic tax revenues from foreign tax competition.
Today, the majority of financial centres are well regulated and well respected. The also offer companies and investors the opportunity to reduce compliance costs and take advantage of countries dedicated to servicing their needs. Some countries are focussed on attracting a specific type of company. They enact legislation that is necessary to provide a respectable base for specific types of business. For example, the Isle of Man is focussed upon attracting EBusiness. These smaller financial centres are likely to be significant beneficiaries of the globalisation of financial markets. Business owners and entrepreneurs may choose to incorporate in these centres and derive significant benefits. They will need to pay taxes on any foreign income they derive or is attributed to them by their tax laws. The majority of financial centres are havens for business, rather than a means to reduce taxes.
Read More21 January 2006 Category: Capital allocation and remote services, Central Brain assembly, Central Brain building blocks, Climate stability 4.0, Critical path to Web 4.0, Declining markets, Democracy 3.0 and global governance 4.0, Equity Market 3.0, Peak oil water food resources and leadership, Private equity and venture capital, Specialist financial centres, Stock exchanges 1.0, Web 1.0 Intellectual property vs. Web 3.0 Community knowledge No Comments
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Peter Elliott
Matt Taylor
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