More than one-half of the world's financial transactions take place offshore or outside the shores of the main tax levying jurisdictions such as the US or the UK. This is not surprising because wealth generation tends to follow the course of maximum after-tax returns. As many of the offshore locations are low-tax or no-tax regimes, companies and wealthy individuals tend to favour these places. Some of the reasons for going offshore include:

• Benefiting from a lower rate of tax or no tax at all compared to the home country.
• Asset protection from possible creditor claims or in the event of matrimonial disputes and litigation.
• Secrecy in relation to business operations as company financial statements do not need to be filed in many offshore jurisdictions.
• Greater cost-effectiveness in conducting certain categories of business from offshore locations that specialise in that particular activity (e.g. re-insurance).
• Securing specific business benefits such as advantageous capitalisation structures or regulatory regimes for financial institutions such as banks, insurers or re-insurers.

There are many reasons for and advantages in going offshore, but care should be taken not to infringe any regulatory or anti-avoidance legislation in place in the relevant onshore home countries.