| It is important to keep in mind that offshore financial | | | | electronic revolution in fund transfer mechanisms |
| centers were originally established by onshore banks | | | | which occurred early on in the 1970s. That single |
| and corporations. Why? Because felt hemmed-in by | | | | technological development made it suddenly possible |
| archaic laws, regulations and statutes. For example, | | | | and affordable to establish banks, corporations and |
| Citicorp (the largest American-owned bank in the | | | | holding companies in relatively remote locations. It |
| United States) was one of the first to set-up | | | | also made inter and intra time-zone business a viable |
| offshore operations. It wasn't too long before 64 | | | | alternative to home-based operations. In turn, this |
| percent of its net income was being generated by | | | | gave rise to the creation of international wholesale |
| offshore sources. | | | | banking - where large deposits could be maintained in |
| Some of the pioneering centers have evolved into | | | | a variety of currencies, transferred via a worldwide |
| world-class financial and economic headquarters. Since | | | | network of corporations, banks, governments and |
| the early 1970s, these centers have initiated policies | | | | individuals, and lent to interested borrowers. This, in |
| deliberately designed to attract international trade by | | | | turn, led to new transnational business practices and |
| minimizing tax obligations and reducing (or entirely | | | | the development of the international subcontracting |
| eliminating) other restrictions on business operations. | | | | of loans and other financial transactions. |
| The result is that economic activity within these | | | | Basically, international havens have become an |
| centers is specifically geared to the special global | | | | established part of the international intermediate |
| needs of outside businesses and investors. | | | | economy. They stand as "brokers" of a sort for |
| Typically, these centers are small states with tiny | | | | global business and finance. It's important to keep in |
| populations. To date more than 75 of these tax | | | | mind that all of this was initiated by large banks, |
| havens exist throughout the world. Each one of them | | | | corporations and even government agencies from |
| is a unique offshore haven of sorts deliberately | | | | around the world. Keep in mind that every |
| intended to attract very particular investors with | | | | government from the Soviet Union to Japan, China |
| very specific needs. | | | | and the United States needs to obtain money on the |
| For example, a center like Aruba was set up primarily | | | | international market. They, too, use money havens |
| for economic development. Formerly dependent on oil | | | | as convenient transaction points. The Bahamas |
| refineries for its revenue, it has now implemented an | | | | became one of the biggest offshore havens because |
| investment policy that gives it entree to the global | | | | it serves the purposes of various government |
| economic system. Becoming an offshore money | | | | entities from finance ministries to intelligence agencies. |
| haven was the answer. By "renting" its laws regarding | | | | Offshore havens are, today, an accepted financial |
| taxation, incorporation and other related legal | | | | fact. Even more important, they are seen as |
| matters, Aruba has begun a much needed process of | | | | legitimate vehicles through which individual investors |
| economic development and diversification. | | | | can take advantage of the offshore option. If is |
| Singapore, on the other hand, was designed to serve | | | | simply a matter of applying the basic financial |
| the Asian dollar market. Today it's one of the most | | | | principles of profit, tax protection and privacy. They |
| prosperous money havens in the world on a per | | | | were developed over the centuries by Florentine |
| capita basis. And Bahrain was developed to process | | | | merchants, royal treasurers and brilliant bankers. The |
| the Middle East's offshore financial needs, especially | | | | mechanisms and strategies change continuously, but |
| Saudi Arabia's. | | | | the goals always remain the same. |
| All these offshore havens were made possible by the | | | | |