Government Development Initiatives - AP Human Geography

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Question

What advantages do offshore financial centers offer to large businesses?

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Answer

“Offshore financial centers” have sprung up around the world in recent years. They are generally, although not always, island nations with a relatively small economy (notable exceptions include Switzerland and Panama). They offer very low taxes and varying degrees of secrecy for large businesses who store a portion of their money in the financial centers of the country. This has benefits for both the large businesses and the governments of the offshore financial centers. Both profit, and both have to worry less about the consequences of their actions. Offshore centers of this kind are often controversial as a result of these practices.

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