Over the past 10 years the Philippines has become a significant outsourcing destination. Today, the Philippines is an important offshore player driven by several factors such as the following: As a result of intense competition, outsourced call centre services and solutions frequently are subject to pricing pressure. The bulk of this amount will be accounted for by the call centres.
Unlike traditional shadow banking, where the OFC bank needs to access a pool of offshore capital to operate, securitisation involves no provision of capital. OFC securitisation involves the provision of legal structures, registered in the OFC, into which foreign capital is placed to finance foreign assets e.
The OFC thus behaves more like a legal conduit rather than providing actual banking services. This has seen a rise in large specialist legal and accounting firms, who provide the legal structures for securitisations, in OFC locations. In normal securitisations, the foreign capital, assets and operators can all come from major onshore locations.
The reason why Deutsche Bank would use an Irish Section SPV is that it is tax neutral, [f] and that it has certain legal features, particularly orphaningwhich are helpful to Deutsche Bank, but which are not available in Germany. Orphaning poses considerable risks of tax abuse and tax avoidance to the tax base of higher-tax jurisdictions; even Ireland discovered a major domestic tax avoidance scheme inby U.
Defences of OFCs[ edit ] Better regulations[ edit ] OFCs sometimes market themselves as leaders in regulation operating under the highest standards with the most advanced legal systems.
Because OFCs are willing to create legal structures for broad classes of assets, including intellectual property "IP" assets, cryptocurrency assets, and carbon credit assets, there is a justification that OFCs are often at the forefront of certain types of regulation.
However, in the area of more general regulation, there is little real evidence to support these claims. In addition, there are contrary examples, even from the biggest OFCs, of poor regulation and oversight.
Supporters of OFCs also claim that the costs of regulation and operation in OFCs are lower than in the major financial centres due to scale effects and cheaper operating locations.
There is evidence that OFCs have faster approval times, even 24 hours, for approval of new legal structures and special purpose vehicleshowever critics highlight this aspect as a sign of weaker regulation and oversight in OFCs e. Irish Section Special Purpose Vehicle SPV One of the most important service lines for OFCs is in providing legal structures for global securitisation transactions for all types of asset classes, including aircraft finance, shipping finance, equipment finance, and collateralised loan vehicles.
In addition, aggressive legal structuring, including Orphan structuresis facilitated to support requirements for Bankruptcy remotenesswhich would not be allowed in larger financial centresas it could damage the local tax base, but are needed by banks in securitisations.
As the effective tax rate in most OFCs is near zero e. However, OFCs play a key role in providing the legal structure for global securitisation transactions that could not be performed from the main financial centres. Promotion of growth[ edit ] The most controversial claim is that OFCs promote global economic growth by providing a preferred platform, even if due to tax avoidance or regulatory arbitrage reasons, from which global capital is more readily deployed.
Tax havens [k] change the nature of tax competition among other countries, very possibly permitting them to sustain high domestic tax rates that are effectively mitigated for mobile international investors whose transactions are routed through tax havens.
Using both bilateral and multilateral samples, we find empirically that successful offshore financial centers encourage bad behaviour in source countries since they facilitate tax evasion and money laundering [ Spiegel, "Offshore Financial Centers: The specific problem is: September Legal structures[ edit ] The bedrock of most offshore financial centres is the formation of offshore legal structures: Many corporate conglomerates employ a large number of holding companies, and often high-risk assets are parked in separate companies to prevent legal risk accruing to the main group i.
Similarly, it is quite common for fleets of ships to be separately owned by separate offshore companies to try to circumvent laws relating to group liability under certain environmental legislation. Wealthy individuals who live in politically unstable countries utilise offshore companies to hold family wealth to avoid potential expropriation or exchange control restrictions in the country in which they live.
These structures work best when the wealth is foreign-earned, or has been expatriated over a significant period of time aggregating annual exchange control allowances. Many countries from France to Saudi Arabia and the U. By placing assets into an offshore company, and then having probate for the shares in the offshore determined by the laws of the offshore jurisdiction usually in accordance with a specific will or codicil sworn for that purposethe testator can sometimes avoid such strictures.
By being domiciled in a low tax jurisdiction investors only have to consider the tax implications of their own domicile or residency. Derivatives and securities trading: Wealthy individuals often form offshore vehicles to engage in risky investments, such as derivatives and global securities trading, which may be extremely difficult to engage in directly onshore due to cumbersome financial markets regulation.
Exchange control trading vehicles: In countries where there is either exchange control or is perceived to be increased political risk with the repatriation of funds, major exporters often form trading vehicles in offshore companies so that the sales from exports can be "parked" in the offshore vehicle until needed for further investment.
Trading vehicles of this nature have been criticised in a number of shareholder lawsuits which allege that by manipulating the ownership of the trading vehicle, majority shareholders can illegally avoid paying minority shareholders their fair share of trading profits.
Hong Kong is frequently a financial center for corporate structuring.
Stock market listing vehicles: Successful companies who are unable to obtain a stock market listing because of the underdevelopment of the corporate law in their home country often transfer shares into an offshore vehicle, and list the offshore vehicle.
Large corporate groups often form offshore companies, sometimes under an orphan structure to enable them to obtain financing either from bond issues or by way of a syndicated loan and to treat the financing as " off-balance-sheet " under applicable accounting procedures.
In relation to bond issues, offshore special purpose vehicles are often used in relation to asset-backed securities transactions particularly securitisations.
Highly indebted persons may seek to escape the effect of bankruptcy by transferring cash and assets into an anonymous offshore company. The Enron and Parmalat scandals demonstrated how companies could form offshore vehicles to manipulate financial results.
Although numbers are difficult to ascertain, it is widely believed that individuals in wealthy nations unlawfully evade tax through not declaring gains made by offshore vehicles that they own.Offshoring call centres is an important strategic decision for any company, and getting it right requires careful consideration of a number of factors, writes Leon Gettler In a globalised economy, more companies are sending finance back-office and call centre jobs offshore to improve access to.
Communication issues in offshore-onshore model. some degree of offshoring or right shoring as some tend to call it. services, back office functions, Call . While some businesses have the resources to support an in-house call center or hand it off to a U.S.-based call-center provider, an offshore contact center is generally a more cost-effective option.
The ability to offer first time call resolution in an efficient, customer-focused and customer-friendly manner is fast becoming an important differentiator, and any organisation considering offshore call centres needs to ensure that they address this issue.
As a customer, I really hate offshore call centres and the companies that use them, not just because of language difficulties, but also because I am very aware that jobs have been exported from my. An Offshore Financial Centre or OFC is defined as a country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the noting that: Offshore financial centres (OFCs) are not easily In relation to bond issues, offshore special purpose vehicles are often used in relation to asset.