Delaware beats Cayman as most secretive financial centre
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| Published on Tuesday, November 3, 2009 |
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By Kim Dixon
WASHINGTON, USA (Reuters) -- The US state of Delaware beats all other international financial centres, including the Cayman Islands, in a contest for the most secretive financial jurisdiction, a tax justice rights group said on Saturday.
The United States, led by the eastern seaboard state, took in $2.6 trillion in deposits from non-resident corporations and individuals in 2007, according to a survey of financial jurisdictions analysed by the Tax Justice Network.
The survey of laws, practices and size of inflows in 60 jurisdictions found Delaware coming in first, followed by Luxembourg and then Switzerland. The Cayman Islands and the United Kingdom round out the top five.
The ranking is based on a composite of total offshore activity and measures such as whether a jurisdiction obtains beneficial ownership information about companies and the degree of cooperation in turning over requested financial information.
Delaware is attractive because it does not tax profits realised outside the state and does not require companies to be physically present, according to the Tax Justice Network.
There are nearly 700,000 active entities registered in Delaware -- and about half of those publicly traded in the United States, according to the group.
Total US deposits of non-residents rose from about $1 trillion in 2001 to $2.6 trillion in 2007, according to the study.
In Luxembourg, non-resident deposits rose to $500 billion from $101 billion over the same period. In Switzerland, such deposits rose to $1.45 trillion from $103 billion during the period.
Larry Hamermesh, a business law professor at Widener University in Delaware, said the state gets an unfair rap.
For example, he said tax justice groups criticize the state for not obtaining companies' beneficial ownership information when they incorporate in the state.
But no other US state actually requires such information, Hamermesh said.
"Delaware is no more secret than any other US state," he said, noting that Delaware's attraction to business is its flexible laws and expert courts. | | | | Reads : 681 | | | |
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