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Why is it advantageous for the country of registration to provide tax benefits?
These locations are usually situated in geographically small countries. The population is usually small. Tourism and various services play the most important role in their economies. Offshore businesses generate considerable revenue for them. On the one hand, concrete employment opportunities are created: various law offices, a state registration apparatus, representatives, banks registered on these territories, etc. are required. On the other hand, through the state duties (registration and re-registration fees) and taxes the population of the country obtains considerable revenue. Let us consider some statistics. The British Virgin Islands have a population of 17 000 and currently some 320 000 offshore companies are registered there. If all the companies registered on this territory pay the annual duty of 300 US dollars, then the duties paid by the offshore companies alone represent 5200 US dollars per local resident.
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