Offshore Company - Illegitimate Uses

Illegitimate Uses

Historically the activities of offshore companies have included activities that were or have become illegal. These include

• The finance of terrorism
• Money laundering
• Tax evasion
• Fraud (including investor fraud)
• Protection from current or future creditors (including taxation authorities and spouses)
• Irregular trading practices (such as increasing margins on deals by interposing clandestinely controlled offshore companies as apparent third parties)

The situation has much improved since the 1970s and 1980s largely due to increased regulation and general changes in commercial practice. The leading offshore financial centres are now more compliant with the Financial Action Task Force on Money Laundering's '40+9' recommendations than many onshore financial centres. However some traces of these abuses persist today both in offshore and onshore jurisdictions.