OFFSHORE FINANCIAL CENTRES IN THE GLOBAL MOVEMENT OF CAPITAL

Abstract

In the article the offshore financial centres are studied in the global capital flows. It is stated that they create a paradoxical situation: on the one hand, they contribute to the acceleration of international financial flows and can be a tool for effective capital management, and on the other hand, they are often used for tax evasion, money laundering and circumvention of financial regulations. The article contends that popular offshore jurisdictions have gained a reputation as reliable financial centres due to their strong rule of law, stable regulation and neutrality. The main economic model of these centres is based on the provision of financial services. It is noted that the current economic situation requires a review of the existing mechanisms for controlling cross-border financial flows and strengthening efforts to combat tax crimes. Despite the fact that there is currently sufficient data to assess progress in this area, many measures are not effective enough. The jurisdictions that are most conducive to global corporate tax avoidance schemes as of October 2024 are assessed. Offshore jurisdictions are attractive to investors due to the opportunity to invest in various alternative assets, including private equity, hedge funds, venture capital and real estate investment funds. Such diversification provides stability and resistance to inflation, which is an important contrast to traditional markets. A large number of offshore financial centers implement business-friendly policies, including attractive tax incentives, residency programs and streamlined regulations to attract foreign direct investment and high-net-worth individuals. Despite the overall slowdown in global economic growth, offshore jurisdictions continue to demonstrate stable, albeit moderate, GDP growth, thanks to their favorable regulatory environments and pro-business policies. Offshore hubs not only facilitate transnational capital mobility but alsoconcentrate global expertise. It is concluded that offshore financial centres play a critical role in the global movement of capital, providing not only stable access to global financial resources, but also reducing the tax burden for corporations and investors. Their ability to accumulate significant amounts of assets and consolidate profits through tax havens allows them to reduce budget revenues, which leads to losses of hundreds of billions of dollars annually.