Research On Offshore Financial Markets And The Related Tax Policies

As a historic innovation in international financial markets, Offshore Financial Markets have brought many precious opportunities for countries to develop their economies and carry out financial innovation, and consequently, obtaining huge profits in the process of developing offshore financial markets. However, the development of offshore financial markets also leads to some problems. In order to maintain the healthy development of financial market and world economy, international organizations take various measures to strengthen the supervision of Offshore Financial Markets.During the past twenty years, especially in the recent decade, Offshore Financial Markets have been developing in a rapid speed. This greatly promoted the process of economic globalization and financial liberalization. Nowadays, Hong Kong RMB Offshore Financial Center has been established; Hainan Offshore Financial Center is also exploring its way of development. The increasingly development of Offshore Financial Markets calls for the innovations on the corresponding tax policies and laws. Reasonable tax policies and laws can not only avoid losses of revenues, but also ensure the healthy development of Offshore Financial Markets; and consequently, improve the development of economy.The general ideas of this paper are listed below. First, by analyzing the developmental history and the theory of offshore financial markets, as well as the related literatures both at home and abroad, this paper studies Offshore Financial Markets and the development trend of the corresponding revenue policies and regulatory measures. Second, through the comparison of differences between different kinds of Offshore Financial Centers and their tax policies, this paper states some proposals to establish and improve the tax policies of Offshore Financial Markets in China. The proposals, which adopt experiences from international Offshore Financial Centers, are based on the practical situation of Offshore Financial Markets in China. Third, according to the actual situation of Hainan Province, this paper puts forward several suggestions on how to establish and complete the tax policies for Offshore Financial Markets, which would be quit beneficial for the establishment of Hainan Offshore Financial Center.This paper consists of seven parts:The first part--Introduction In this part, I mainly introduce the development path of Offshore Financial Market and elaborate the research background, purpose and significance of this paper.The second part--Literature Review This part mainly elaborates literatures related to Offshore Financial Markets from both at home and abroad. I summarize and classify the literatures from the aspects of definition, supervision and related tax policies. Then I present the research perspective of this paper.The third part--Theory of Offshore Finance and Tax Heaven This part mainly introduces the definition, characteristics, and modes of Offshore Finance. Then I compare the definition and features of Offshore Financial Centers and Tax Heavens. Finally, I state the related definition of tax policies.The fourth part--Develop Trend of domestic and international Offshore Financial Markets and Tax Policies This part consists of the analysis of the development trend of Offshore Financial Markets, the selection of the development mode for China’s Offshore Financial Centers, and the trend of regulatory and tax policies for Offshore Financial Centers.The fifth part--Differences of Offshore Financial Markets and tax policies In this part, I selected some representative international offshore financial market, and explained their characteristics and tax policies, respectively. Then I analyze the current situation and problems of the tax policies of Offshore Financial in China.The sixth part--Construction and Improvement of China’s Offshore Financial Tax System In this part, I suggest some measures that may be adopted to improve and complete the tax policies in Offshore Financial Markets, based on the present situation of the development of Offshore Financial Markets in China.The seventh part--Suggestions on the Establishment of Tax Systems in Hainan Offshore Financial Center This part suggests some recommendations to improve the tax policies and systems according to the characteristics of Hainan and the development trend of Offshore Financial Centers.Overall, the main points and contributions of this paper are reflected in the following aspects:1. After the evaluation of existing research, this paper summarizes the definition of Offshore Financial Centers and the differences between Offshore Financial Centers and Tax Heavens. Also, this paper elaborates the financial services offered in Financial Offshore Centers.2. This paper compared the characteristics and tax policies of some representative Offshore Financial Centers. Especially, this paper points out that it is essential to attracting foreign capitals to develop economy by fully exempting taxes related to foreign capital investment gains.3. This paper examines the development trend of Offshore Financial Centers, especially the development trend of Hainan Offshore Financial Center.4. This paper also analyzes the current status and management problems of Offshore Financial Centers in China, and consequently, suggests effective ways that may be implemented to improve the tax management in Offshore Financial Centers in China.5. This paper states that Hainan Province is expected to be established as an Offshore Financial Center in China. Also, some implementations are suggested to improve the tax management in Hainan Offshore Financial Center.However, this article also has some shortages. Due to the difficulties in collecting the relevant data, the data used in this paper is not complete. In addition, the suggestions mentioned to improve tax management in Hainan Province are resulted from qualitative analysis, rather than quantitative analysis. As a result, the suggested implementations may not be very convincing. Further studies can rely more on realistic data and on quantitative analysis.