Mapping Financial Secrecy

The Hague Convention of the Law Applicable to Trusts and on their Recognition was signed on 1 July 1985 but came into force on 1 January 1992. The Convention aims to harmonise trust law by creating mutual legal recognition of trusts, defining the characteristics of trusts and setting out rules for determining the governing law of trusts with a cross border element.

A strategy intended to reduce investment risk using call options, put options, short selling or futures contracts. Often refers to taking a futures position that is equal and opposite from a position in the cash market. A hedge can be used to lock in existing profits. It is often claimed that hedging is best done offshore, but there is no evidence to support this assertion and most hedging expertise is undertaken onshore even if the transaction is recorded through an offshore enterprise.

A transaction taking place and regulated within the geographical limit of a jurisdiction. Compare with somewhere, elsewhere and nowhere.

Otherwise known as HNWIs (pronounced hen-wees). Generally categorised as individuals with more than US$1 million of liquid financial assets available for investment.

A company that either wholly owns or owns more than 50 percent of another company, the latter being called a subsidiary. An intermediate holding company is a holding company which has one or more subsidiaries but is itself owned by another company. The term ‘ultimate holding company’ refers to the one that is finally not controlled by another company.

The tax and regulation regime in a jurisdiction may discriminate between local companies (or trusts, etc.) and those that are owned by non-resident people. Horizontal ring-fencing occurs if non-resident people or foreign (business) activity is generally privileged in matters of tax and regulation. For example, secrecy jurisdictions often exempt non-residents from paying income tax on corporate and/or personal income. Such jurisdictions might also exempt non-residents from paying tax on income that stems from foreign sources and at the same time encourage or allow these non-residents to conduct business primarily or exclusively abroad.

The Human Development Index measures the "development" of countries and their populations by capturing more than purely economic data. It is published by the United Nations Development Program (UNDP). Apart from monetized income, it integrates life expectancy and educational attainment (e.g. literacy rates) of the population in the Index. The Index is a single number between 0 and 1, where 1 stands for very high human development, 0 for very low human development.

The Human Development Index Rank is the rating a country gets if its value of the Human Development Index is compared with the value of 178 other countries that are covered by the Human Development Index (179 in total in 2008). The first rank indicates the highest level of Human Development, rank 179 indicates the lowest Human Development.