What are the types of offshore financial markets?

Hengxin Taifu for you to answer the classification of offshore financial markets:

(a) According to the actual operation of the offshore financial markets can be divided into the following four types

1. That is, the domestic financial market and offshore financial market business into one. Residents and non-residents can engage in a variety of currency deposits and loan business, the bank's offshore business and onshore business is not a strict boundary, combined accounts, London and Hong Kong is this type. London offshore financial market is characterized by:

(1) offshore financial transactions in currencies other than the country where the market is located (i.e., European currencies other than the pound sterling). 1979 in London, banks can also be operated in the European pound sterling deposits business, only that this transaction can still only be reached through the British Channel Islands offshore financial center. Banks set up their establishments there and conduct their transactions through telecommunication facilities. So from a legislative point of view, it is not possible to operate direct European pound business in London.

(2) In addition to offshore financial business, residents are also allowed to operate onshore business and domestic business, but must pay deposit reserves and related taxes, and financial institutions strictly control the issuance of "full business" license. Therefore, in this kind of market, the scale of onshore business is far smaller than that of offshore business. Although Hong Kong is located in Asia, but because of its special relationship with the United Kingdom, its offshore, the financial market also belongs to a body type.

2. Separate type, also known as internal and external separation type. That is, the domestic financial business and offshore financial business is handled separately. Residents of the deposit and loan business and non-residents of the deposit and loan business separately, and so on. Typical areas are New York, Singapore, Tokyo and Bahrain. New York "International Banking Facility" (IBT ) has the following characteristics:

(1) All U.S. banks and foreign banks authorized to take deposits can apply for membership in the "International Banking Facility", can be its member banks. Transactions under the International Banking Facility are strictly limited to those between member institutions and non-residents.

(2) Transactions in this market are exempt from reserve requirements, interest rate caps, and deposit insurance, and traders are also exempt from interest withholding and local taxes.

(3) U.S. dollars deposited in New York's International Banking Facility (IBF) accounts are treated as offshore dollars and are strictly separate from domestic dollar accounts. It can be seen that the New York offshore financial market is characterized by the scope of business, including the currency of the country in which the market is located (i.e., the United States dollar) offshore business, and in the management of offshore dollars and the country's domestic dollar strict separation of accounts. In addition, unlike London's high degree of liberalization, the United States' restrictions on the International Banking Facility are much stricter than those imposed on offshore financial markets in other countries. Singapore offshore financial market because of the government's strong support and strict supervision, and in view of the characteristics of the Asian financial market pioneered a distinctive Asian dollar market and financial futures market, so that Singapore can be flexible and free of the system of Hong Kong and the capital strength of Japan's competition, the rapid development of South-East Asia's largest impact of the international financial center. As of September 1994, the total assets of the market amounted to US$419.372 billion, an increase of 76.1% from US$238.2 billion at the end of 1988. Compared with other offshore financial markets, the Tokyo offshore financial market established in 1986, the control is quite strict, such as the provisions of the bond business and forward futures business is not allowed, in addition to business tax, but also to collect government taxes and stamp duties.

3. Bookkeeping type, also known as tax haven type. That is, this kind of market does not have the actual offshore capital transactions, but only for other market transactions bookkeeping business, the purpose is to avoid the trading market where the tax, the Bahamas and Cayman in the Caribbean, as well as Bermuda, Panama, and the Isle of Man in Western Europe belongs to this type. It has been reported that, since the 1970s, many banks have transferred a large number of assets to the Bahamas, Cayman and other islands in the Caribbean, where there is political stability, low taxes and no financial regulation. Many foreign banks, in order to evade taxes, just keep books here and do not carry out actual transactions, thus creating a kind of offshore financial market on the books.

4. Leakage type. Its basis is the separation type, that is, offshore business and onshore business separate two major accounts, residents of the deposit business and non-residents of the deposit business separate but allows offshore account on the funds loaned to residents. This type is mainly found in developing countries, typically in the Jakarta offshore financial market. Hengxin Taifu provides services related to offshore finance.