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The
Benefits of Less Regulation
Regulation
covers the avoidance of fraud (to protect investors
from their own ignorance or cupidity), the avoidance
of money-laundering (nothing to do with bona fide
investors) and has prudential aspects, i.e. it
tries to prevent investment managers from making
risky investments that could lead to loss for
investors.
The
problem is that well-meaning regulations act as
a strait-jacket for investment managers - they
create an environment that is suitable for widows
and orphans, as they used to be called, but one
that is devoid of opportunities for the expert,
or even for the moderately well-informed investor.
Most people thinking about offshore investment
are probably well above average in terms of their
ability to avoid fraud, to understand markets,
and to select superior investments. These people
are ill-served by 'widow and orphan' regulation,
and have to look outside their domestic markets
for good returns.
This
is not to say that good returns and risk can be
wholly divorced. It's obvious that junk bonds
are riskier investments than triple A sovereign
debt, and hence have a higher coupon. It was equally
obvious that Russian GKOs, yielding 100% a year,
were a risky investment - but the banks which
invested in them for five years knew that, and
were not surprised when they lost their capital
in 1998, even though they made a song and dance
about it after the event.
Hedge
funds have illustrated the benefits of investment
freedom very clearly: they initially almost all
chose offshore bases, mostly for regulatory reasons,
and their high minimum investment levels will
traditionally have deterred the most vulnerable
types of investor. Most investors in such funds
received returns of 20% or 30% a year for ten
to fifteen years until recent years, when an explosion
in the number of funds made it harder to make
good profits from alternative strategies.
Hysterical
accusations that hedge funds increase market volatility
are far from the truth: if anything, the opposite
is the case. It is the dramatic increase in global
liquidity that has increased the apparent size
of swings. Hedge funds and derivatives tend to
dampen volatility, not increase it.
It
is also far from the truth to say that 'onshore
= safe' and 'offshore = risky'. Many offshore
jurisdictions have high-quality regulatory regimes
that quite clearly separate the risky goats from
the safe sheep, without constraining investor
choice. One of the main goals of www.investorsoffshore.com
and its associated sites, www.lowtax.net
and www.tax-news.com
is to explain the regulatory environment in individual
offshore jurisdictions, and to contrast it with
the regime in 'high-tax' areas.
See
Regulation of Alternative Investment
for a fuller description of regulatory regimes
in 'high-tax' and 'low-tax' areas, and the freedoms
or lack of them which apply to investors in various
different residential situations.
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New On The Network Today
This feed is published daily with selected new or updated
content from across our network. For a list of network sites, many of
which feature daily news, see below. |
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| 02/09 New
Lowtax Editor Column, by Kitty Miv |
| 01/09 International
Privacy and Security, Investors Offshore special feature |
| 31/08
Lowtax Belize, annual update |
| 27/08
IRS To Drop UBS Lawsuit, Tax-News.com |
| 26/08 New
Lowtax Editor Column, by Kitty Miv |
| 25/08 New
PBTG Editor Column, Caroline, PBTG editor |
| 24/08
Uruguay Stays On OECD Grey List, Tax-News.com |
| 23/08 Don't
Forget Doha, And I Don't Mean The Tennis, Jeremy Hetherington-Gore
blog entry |
| 20/08
Ireland Plans Social Security Overhaul, Tax-News.com |
| 19/08 New
Lowtax Editor Column, by Kitty Miv |
| 18/08 New
PBTG Editor Column, Caroline, PBTG editor |
| 17/06
Lowtax Cayman Islands, annual update |
| 16/08
Germany's Fiscal Court Seeks Property Tax Reform, Tax-News.com |
| 13/08 Jurisdiction
Special Focus: Antigua and Barbuda, Investors Offshore special feature |
| 12/08 New
Lowtax Editor Column, by Kitty Miv |
| 11/08 New
PBTG Editor Column, Caroline, PBTG editor |
| 10/08 Brazil
Cuts Import Tariffs, Tax-News.com |
| 09/08 Ukraine
Tax Code Published, Tax-News.com |
| 06/08
France Plans Reform Of Property Tax Credit, Tax-News.com |
| 04/08 New
PBTG Editor Column, Caroline, PBTG editor |
| 02/08 Islamic
Finance - The New Mainstream Alternative, Investors Offshore special
feature |
| 28/07 New
PBTG Editor Column, Caroline, PBTG editor |
| 27/07 UK
Launches Raft Of Tax Consultations, Tax-News.com |
| 26/07 Fat
Tax On The Menu , Jeremy Hetherington-Gore blog entry |
| 23/07 Sarkozy
Seeks 'Fiscal Convergence' With Germany, Tax-News.com |
| 20/07 Singapore
Base For Tuvalu OIFC, Tax-News.com |
| 15/07 St
Vincent & The Grenadines, Investors Offshore special feature |
13/07 Tax-
News.com Jersey Review 2010-2011 |
| 12/07 Goodbye
To All That, Jeremy Hetherington-Gore blog entry |
06/07 Hong
Kong Full PBTG Guide, added to Personal Business Tax Guide |
| 28/06
Lowtax Dubai, annual update |
| 18/06 Singapore
- Another Hong Kong?, Investors Offshore special feature |
| 15/06 Swiss
Parliament Approves UBS Agreement, Tax-News.com |
08/06 Dubai
Full PBTG Guide, added to Personal Business Tax Guide |
| 04/06
Lowtax Panama, annual update |
| 01/06
Lowtax Luxembourg, annual update |
03/03
Personal Business
Tax Guide, PBTG, has launched! |
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| Providing essential tax news and information for globally
mobile artists, contractors, entrepreneurs, professionals, small businesses,
sportspersons and entertainers. |
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| Lowtax Network Sites |
| Lowtax Network Portal:
'Low-tax' business and investment in the top 50 jurisdictions covered in
exceptional detail. |
| Tax News: Global
tax news, continuously updated through the day. |
| Investors Offshore:
The independent offshore and alternative investment guide for expatriates
and the globally aware investor. Sponsored by HSBC
Bank International. |
| Law & Tax
News: Daily news and background data on tax and legal developments
for international business. |
| Offshore-e-com:
A topical guide to offshore e-commerce focused on tax and regulation. |
| Lowtax Library:
One of the web's largest and most authoritative business and investment
information sources. |
| US Tax Network:
The resource for free online US taxation information, covering: corporate
tax, individual tax, international tax, expatriates, sales and e-commerce
tax, investment tax. |
| NEW! Personal
Business Tax Guide: Providing essential tax news and information
on business for contractors, entrepreneurs, professionals, small businesses,
artists, sportspersons and entertainers. |
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