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OFFSHORE CENTERS IN THE MODERN WORLD ECONOMY
V.E. Tolstikova, student
St. Petersburg state university of economics
(Russia, St. Petersburg)
DOI: 10.24411/2411-0450-2019-10595
Abstract. This article discusses the development of offshore centers in the modern world economy. The impact of technical progress on the development of offshore centers has also been investigated, and the relationship between financial globalization and offshore has been established.
Keywords: offshore centers, global network, internal offshore, technicals progress, financial globalization.
Over the past two decades, the increasing attention of the world expert community has been attracted by the expansion of the practice of using offshore companies in TNC activities. In the course of the global economic crisis, government officials and politicians began to worry about the problems arising from the growing number of offshore companies. It is not by chance that the leading countries of the world participating in the G-20 summits expressed their intention to take actions aimed at ensuring the openness and transparency of the "tax havens".
Offshores are companies from the relevant jurisdictions where: It is allowed not to submit financial statements. There are no tax claims. There are increased requirements for confidentiality of owners of local companies (that is, in the state registers for companies there is no information even about directors and shareholders) [1].
What is offshore in the modern world?
Currently, offshore financial centers (hereinafter - OFCS) are an integral part of global finance. They are located in countries that provide corporations with preferential taxation conditions, a comfortable legal environment, and anonymity in financial transactions. The driving force of offshore companies is the contradictions that arise between public and private interests in the conduct of business. Obviously, states are striving to control and regulate national economies, business entities - to maximize profits. OFCs are an effective tool for managing risks, regulating the prices of export-import contracts, selling copyrights, transferring equipment on leasing,
conducting investment and speculative activities on world financial markets, perform the functions of protecting property, etc.
All of the above causes the desire of many foreign and Russian corporations to take advantage of the OFC.
The entry into the world arena of a large number of independent states in Asia, Latin America and Africa in the post-war period stimulated the development of offshore business. Many countries did not have the opportunity to independently enter world markets, competing with other more developed countries, as they did not have sufficient economic opportunities. First of all, it concerned small states, not having a special economic potential and not possessing sufficiently natural resources [2].
The formation of offshore centers in the territory of such states was the main decision in the current situation. Before such states, great opportunities opened up, practically they were able to "make money out of thin air", since insignificant resources were spent on the formation of an offshore center, and the income that brought enormous from this event.
Today, offshore business for many island states has become one of the structural elements of the economy, as the growth rates in this sector are laid into the budget of these countries for the next year.
Offshore due to financial globalization
Accurately and concisely the notion of "finance" can be defined as a combination of financial resources international in their statics and dynamics. Thus, international balance
sheets include payment balances of individual countries and international financial markets, capital markets and stock markets. And already direct participants in the global financial system are transnational companies, international banks and investment institutions. Thus, without in the least denying the relationship at the level of the operation-actor of such phenomena of the world economy as international finance and transnational companies, one can hardly be considered synonymous, all the more equivalent from a substantive point of view.
It is financial globalization that has caused the phenomenon of "offshore" international business, and therefore it is so important to take into account the tax component of integration processes for its analysis. However, global tax planning should not be associated exclusively with offshores, although the scale of the latter's activity is truly enormous: according to the OECD, through so-called tax havens cover more than half of world trade and a third of foreign direct investment that TNCs make abroad, and the volume of lost taxes by European countries as a result of "offshore" amounts to at least $225 billion annually.
Companies with well-established international tax planning have the opportunity to use the difference in tax regimes between countries, placing their business in the relevant jurisdictions, and this can not be considered "offshore".
If you do not consider the creation of an offshore company solely for the purpose of reducing tax liabilities, then you can pay attention to the fact that the existence of any offshore scheme is based on a real business goal, for example, facilitating the execution of certain operations, or reducing transaction costs. This allows us to conclude that the goal of creating an offshore in the business chains of any holding company or TNCs is to minimize the costs of running the main business, but primarily transactional, and not tax costs at all.
Offshore due to technical progress
One of the important processes that influenced the rapid development of offshore centers was technical progress, more precisely the development of modern means of com-
munication and communications. The emergence and continuous development of the global Internet, satellite communications, and others have reduced to a minimum the time costs of the communication process between remote parts of the world. Today, it can be argued that without high technology and communications, it would have been impossible to develop an offshore business in its modern sense.
As a result of the emergence of new telecommunication technologies, the movement of international capital has sharply increased, competition between new economies with favorable tax conditions has increased, and a network of offshore zones has been formed.
The global network of offshore centers has an uneven distribution across continents: 28 of them are in Europe, 25 are in Central and South America, 19 are in Asia, 14 are in Oceania, and 7 are in Africa and North America. This location of offshore centers testifies to their 3 leading financial cities - London, New York and Tokyo.
As a result, a global network of offshore centers has now been established, although new ones have begun to appear, including in Oceania, Central America, and also in the republics of the former USSR. According to D. Marshall, the existing configuration of offshore centers suggests that financial capital is now just as important an element as trading and manufacturing [3].
Is offshore a mediation institution?
Almost from the moment of the emergence of the concepts "offshore" or "offshore business", they have been consistently associated with various forms of cash withdrawal from taxation. The tendency to explain with tax optimization all types of offshore business practices, the meaning of which is clear only to specialists, leads to excessive simplification of the problem by many researchers and to copy the findings of predecessors.
In the context of globalization, financial flows become an independent force that influences the development in the world economy of a whole institution of intermediaries. These are companies whose main activity is to conduct multi-stage credit, bill of exchange schemes, conducting transactions related to the organization of procurement or marketing
of products of enterprises. They are created both as independent structures, and as agents at various corporations.
A classic offshore company is a commercial intermediary. This point of view can cause a number of criticisms, because there was an idea of offshore firms as independent participants in economic relations, agents.
The intermediary function of offshores, at first glance, seems rather abstract. From a legal point of view, it is implemented in the form of a legal entity, a shell attached to a specific jurisdiction that facilitates the execution of a transaction. Although in fact such a firm is completely controlled by the main business structure. Any offshore company is created in the chain of intermediary firms and almost never as an independent participant in the business.
Conclusion
Offshores are presented as one of the indispensable tools for the development of the financial system today. If it is used for aimless, from the point of view of creating additional value, transferring profits from the business, then everything depends not on the offshore itself, but on the economy and the conditions in which this business is conducted. Strengthening control over the movement of speculative capital, incl. the possibility of closing offshore centers is increasingly being discussed in the global economic community. But many agree on one thing: this cannot be done without affecting the foundations of global capitalism, since offshore companies are integrated into the modern model of international business, representing an important institution of mediation.
References
1. Savulyak Edward. What you should know about offshore in 2019? // Financial director. -2019. - №5.
2. Savin V.A. Does Russia need free economic zones? - M.: World Economy and International Relations, 2013.
3. MarshallD. Understanding Late-twentieth -century Capitalism: Reassessing the Globalization Theme // Government and opposition. - L., 1996. Vol. 31, № 2.
РАЗВИТИЕ ОФФШОРНЫХ ЦЕНТРОВ В СОВРЕМЕННОЙ МИРОВОЙ ЭКОНОМИКЕ
В.Е. Толстикова, студент
Санкт-Петербургский государственный экономический университет (Россия, г. Санкт-Петербург)
Аннотация. В данной статье рассмотрен вопрос развития оффшорный центров в современной мировой экономике. Также исследовано влияние технического прогресса на развитие оффшорных центров и установлена зависимость между финансовой глобализацией и оффшорами.
Ключевые слова: оффшорные центры, глобальная сеть, внутренние оффшоры, технический прогресс, финансовая глобализация.
