Deeoffshorization » Welcome to Serbia


America, trendsetter in almost all areas in life of us all. Probably the most influenced area by America is business and banking.

Business and banking market were, for ages, being shaped by strong economies and strong countries in EU who are pioneers in these areas. These countries are constantly adding new laws, rules and regulations trying to keep business transparent. On the other hand, wealthy individuals and companies are constantly trying to find ways to protect and sometimes hide their identity and funds.

Banking secrecy was first codified with the Banking Act of 1934 in Switzerland, thus making it a crime to disclose client information to third parties without their consent.
Offshore banking is a segment of the finance industry whose birth can be traced back to Vienna, Austria. Offshore banking was born when the neutrality of Switzerland was established during the Vienna Congress in 1815.

Despite the contradictions, one thing is clear: that offshore banking was born out of the need for individuals to find a haven for their wealth.

Out of all mentioned above tax heavens were born. Tax heavens are countries with preferential tax regimes or to put it simply countries where tax is 0%.

Majority of businesses and HNWI rushed to tax heavens being that this way they could avoid high tax rates in their own countries and that they could protect and hide their identity through offshore structures and companies.

It is estimated that America alone is losing 100 BN USD every year because of offshore destinations and tax heavens. Other countries have suffered funds lost as well.

Out of this, mentioned rules and regulations came and the last one is common reporting standard, CRS.

With common reporting standard in 2018 and other regulations regarding substance tax heavens were given choice stop immediately with offshore activities or prepare to be black listed by American correspondent banks who control one thing absolutely needed in business and that is dollar. This meant that companies need to have substance (offices, employees etc.) and that accounts without fully transparent structures (Directors and UBO’s) are being closed.

For example, situation in Cyprus according to my partners is like this, there are around 400.000 registered in Cypriot business registry, and between 50.000 and 100.000 have problem with the accounts and more accounts are being closed as this article is being written.

All this situation is raising a lot of questions from the business sector. Those questions are where to go, what is the wright location for my business?

Answer to this are countries with balanced banking systems who are still developing their industry and economics like Serbia and Montenegro for example. Usually these countries have tax rates below EU average, very low operating costs and generally warm business climate suitable for investments.

Bojan Timotijevic
Executive sales Director
Welcome to Serbia Association

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