Offshore Finance

Offshore financial centers provide commercial and corporate services to offshore companies.
The work of offshore finance professionals is usually related to hedge funds or banks who manage overseas or foreign investments.

The formation of different offshore structures is usually the bedrock of offshore financial centers. Some of these structures include:

• Offshore partnership
• Offshore company
• Private foundation
• Offshore trust

The structures can be formed for a variety of reasons (both legitimate and illegitimate). Here are several reasons:

– Asset protection. Rich people who live in unstable countries use offshore companies in order to preserve family wealth and avoid expropriation or certain restrictions in their home country.

– Avoiding forced heirship provisions. This is another legitimate reason for using an offshore company.

– Mutual funds, unit trusts, hedge funds, etc. are usually created offshore, in order to make international distribution easier.

– Joint venture vehicles. Business people often use offshore jurisdictions to set up joint ventures; this is usually done in cases when commercial laws in the country where the commercial center of the joint venture is located, are not sophisticated enough.

Illegitimate Reasons

– Creditor avoidance is another common reason for setting up an offshore company. A debtor can transfer the money and other assets into some (anonymous) offshore company, and avoid bankruptcy.

– Market manipulation

– Tax evasion. It is very difficult to ascertain exact figures, but it is believed that wealthy people use offshore financial centers to evade tax. They simply don’t declare gains created by their offshore vehicles.

Offshore Financial Accountants and Managers

An offshore accountant keeps the records of corporate transactions and prepares financial statements, governed by generally accepted accounting principles and financial reporting standards. A bachelor’s degree in accounting is typically required. Wages depend on work experience and the company. Offshore financial managers are paid to analyze corporate data compared to past and current trends. He or she then will evaluate the current and projected profitability of the company and focus on calculating things like net income over sales and return on equity. Most organizations will require offshore financial managers to have a master’s degree in a finance-related field as well as a certificate as a CFM.

Offshore Financial Tax Analysts and Compliance Auditors

Tax analysts who work for offshore companies focus on calculating fiscal liabilities and the company’s tax-reporting procedures. Individuals finding employment in this field will usually have a BA or BS degree in accounting, finance, or taxation. Offshore financial compliance auditors will focus on reviewing a company’s procedures and guidelines to make sure everything is done in accordance to the international law.