It was bound to happen. A world where financial anonymity and lower taxation could be bought for a few hundred dollars couldn't have lasted long -- and it didn't.
It was back in the early nineteen nineties when the brief period of the "offshore boom" began. As communication technology advanced, and the globalisation of trade turned from a phrase into reality, our world became smaller -- and people increasingly began to seek out opportunities beyond the borders of their own countries.
New tax havens emerged as a number of small island nations passed legislation offering tax and privacy incentives to those lacking such luxuries back home. New incorporation agents sprang up in large numbers; competition was fierce. Offshore companies, once the exclusive domain of a few, were often marketed almost as aggressively as your common detergent. Prices went down, and many were buying.
Of course it wasn't going to last. "If more taxpayers act upon the advantages available outside of our shores, how will we continue to maintain our beloved (and expensive) bureaucracies?" nervous governments wondered.
Finally, the consensus among the so-called tax cartel governments and their subsequent terrorisation of offshore financial centres brought much of the world's offshore industry to where it is today: on its knees, in the dark, wondering where the next blow will come from.
So will the time come when there will be no place left? Will the offshore company enter history as an illegitimate and rightly failed corporate concept? Should we all abandon hope and become voluntary financial slaves of our greedy governments?
No. It's nowhere near as bad.
The victories and defeats
While the tax cartel enjoyed victories in some corners of the world, it encountered stiff resistance in other parts.
Unexpectedly, it was the leaders of the smallest of tax havens that stood up in defence. A special mention should be made of the Barbadian Prime Minister Owen Arthur who has been among the most outspoken opponents of the anti-offshore campaigns. Mr Arthur has vigorously maintained that the tax cartel has no "legal authority" to interfere in the internal affairs of other sovereign nations.
In contrast, many governments of the bigger offshore centres failed miserably in the job for which they were elected -- that is to govern their countries according to the will of their own peoples, and not as per instructions of foreign powers.
Despite its determination, the tax cartel has suffered a series of defeats since the beginning of its campaign:
The true nature of the war
Do not be misled: While this new millennium already provided more justifications for their actions than the OECD-led tax cartel could have hoped for, their true motives are entirely economic. The force with which the tax cartel terrorises offshore havens is directly related to the amount of money that escapes its net as funds move offshore.
Once the general population has been sufficiently discouraged from being involved with offshore tax havens, the anti-offshore campaign will die down.
And there are signs that this is already beginning to happen: many ordinary folk, concerned at being placed in the same category as some of the world's worst enemies, are choosing to remain over-taxed and fiscally un-free. The association between offshore and off-limit has been made.
This is a bad outcome for most, but one that a few experts have foreseen for some time.
At the dawn of a new era
Although the anti-offshore campaign has managed to re-draw the world's offshore map and closed many of the easy routes, this doesn't mean that going offshore has become impossible. In fact, new havens and strategies have become available to those in the know, with the added advantage of many lessons having been learned from the past.
In this new offshore age, choosing where to incorporate or hold one's assets has become dependent upon a greater number of factors. Doing business with those jurisdictions that have shown consistency and resilience to the kind of gun-boat diplomacy used by the tax cartel is a good start, but not in itself enough.
Today, a goal-orientated approach is needed. Incorporating an International Business Company that delivers flexibility, anonymity and zero tax in one easy package and then wondering "now let's see what I shall do with it" is a thing of the past.
Instead, we have to think in terms of where we want to get, and then look around in search of the best route. Finding alternatives and keeping a low profile has become the order of the day. An open mind is necessary and workarounds are sometimes inevitable, but, in the end, most goals can be met, including anonymity of ownership.
As the age of offshore-for-all has come to an end, we are, in a sense, seeing a return to the pre-1990 days, before the "offshore boom" began. Going offshore will always be possible, but it will again call for in-depth knowledge, persistence, a creative mind and good connections.
The era of offshore assembly lines is over, and the era of genuine offshore craftsmanship has returned.
Offshore companies are here to stay.