Will foreign national territories of Great Britain open offshore registers?

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The battle is not over, but a flash of hope is still alive. Grant Shapps told that he supports Cayman, Bermuda and the British Virgin Islands in the refusal to join the register of beneficial ownership.

The issue of creating a public register of beneficiaries began in 2013, when Prime Minister David Cameron promised to stop money laundering. A huge number of beneficial owners who are often foreign legal entities avoid taxpaying through offshore. At the summit G8 group in Northern Irelandthe British Prime Minister proposed the introduction of a public register of beneficiaries.

In December 2014 the Caribbean part of Great Britain territory (the Cayman Islands, British Virgin Islands, Bermuda, Turks and Caicos, Anguilla, Isle of Man) easily rejected the attempts of British ministers to make them set up public registers of beneficial owners of private companies.

Edward Samuel Miliband, the leader of oppositional Labour Party and parliamentary opposition announced that he will make these jurisdictions create national registers of company`s beneficiaries if he wins general elections in May. If they fail to implement this requirement, the politician promised to recommend the jurisdictions that didn`t meet OECD requirements as tax havens for blacklisting. Miliband has lost the vote and clash of interests cooled down. So again Great Britain demands its overseas territories to set up public register of beneficiaries.

In August 2015 Foreign Affairs minister Grant Shapps announced that there is hope that Great Britain government will leave alone its overseas territories and cancel One main registry of beneficial ownerships implementation. Cayman Islands, Bermuda and the British Virgin Islands held an advisory board on this issue and concluded not to set up any registries. Minister Shapps agreed with this decision.

Shapps visited the Cayman Islands this year in early September. His purpose was to explain the main objective of a public register for the residents of the UK. Particularly, that with the introduction of public registry there will be “a real opportunity to provide law enforcement agencies and services with the opportunity to get information about company owner in transparent manner, thus information must be presented not only in a fast and efficient way, but meet every request”.

As Snapps` press-secretary explained, owning to the public registry the authorities will be able to find all companies where the beneficial owner has his sharein the shortest timeline without further queries.

What are the chances that British offshores will open beneficiaries’registries?

Recently in local press the announcement of prime minister of Cayman Islands with new offer was published. Alden MacLaflin told that this jurisdiction is ready to provide Great Britain with agreement where it is stated that company`s registrars must provide all necessary information on the request received on beneficiary ownership during 24 hours. The meeting for agreement confirmation will be held on the meeting of ministers in London.

Who will be also included in One main registry of beneficial ownership?

Anyone who owns more than 25% of shares or voting rights in the company will be obviously entered in the register on the basis of the statement at the G8 summit in 2013. This registry will be accessible to everybody in April 2016.

Pilot program of automatic information change

Every day Cayman Islands attract fewer businessmen. If islands` anonymity loses its relevance, this will strongly affect British economy. Besides, year after year it becomes more difficult to hide from taxes, which is shown by pilot program of automatic information change aiming at taxation. This program is already developed and will be integrated by G20 and OECD in September 2017.

So we can conclude that soon beneficiaries’ registry may become public. And with the launch of the automatic information exchange it will be very difficult to hide from the taxation. There are many countries that offer low tax rates and favorable conditions for business.

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