Investments in offshore territories by Spanish users

It is necessary to remove the halo of mystery and possible illegality of offshore operations. After all it is not only the companies that are forced to carry out financial operations abroad but any professionals with international interests finds the use of these banking services not only beneficial but necessary, as well as any saver or investor who wishes to set up a fund for his retirement. As we have seen before, many people, without being aware of it, are investing or have been investing in tax havens through their pension or retirement funds. Numerous Spanish companies, financial and non-financial, operate abroad through territories of low taxation. The internationalization of the Spanish economy has meant that many entities diversify more and more their activity abroad, seeking more exports and business bases in other countries.

Thus, the Spanish corporate world has multiplied its offshore presence in recent years. Its objectives are to obtain financing, make investments and carry out its activities obtaining the greatest possible benefits, with the least legal restrictions and with the greatest tax savings. Examples are purchase or investment operations in other companies, or joint operations with other companies in other countries that are carried out through offshore territories to invest more safely and profitably in third developing countries, for example in Latin America. The large flow of Spanish investments in Ibero-America tends to follow a scale in the offshore territories of the Caribbean. Some companies have no choice but to resort to tax havens to save taxes that could compromise their profits in a global economy, increasingly competitive. On other occasions, it is the protection of assets against threats of nationalization or confiscations. In habitual business use, these operations are always fiscally transparent, carried out with funds that have already fulfilled their tax obligations, under the freedom of movement of capital. In this situation, offshore centers operate as legitimate investment instruments abroad.

They are not only private individuals or companies, but public companies such as FOCOEX (state company for the promotion of exports and foreign trade) that have used companies registered in tax havens, such as Panama, in their foreign operations. Another case is that of the Generalitat Valenciana that, through a public company, invested in the Cayman Islands nine million six hundred thousand euros in financial products offered by Banco Urquijo. Countries like Cuba have deposited huge amounts of dollars in Switzerland. Individuals and Spanish companies are important users of offshore territories, in view of the figures for transactions declared above. More than half of these investments are made by banks, insurance companies and financial intermediation companies that acquire other companies or that launch investment funds based in tax havens to the domestic market.

The individual profile of Spanish investor is that of a great entrepreneur or a professional with high economic achievements. Traditionally, Spanish diplomats have been users of these services. In recent years the expatriates who work in a multinational or an international organization have joined the group. Every day Spain has more high-level expatriates with very good salaries, who become users of offshore services. Expatriates get their salaries in other countries and are not subject to Spanish tax regulations or may not be if they take appropriate measures. 

In this situation they are in the best of conditions to take advantage of the advantages of offshore services. Many times they receive their salary or receive their income through banks and accounts located in territories of low taxation. In addition, their status as a resident in a country can allow them even more tax savings, as many countries want to attract highly qualified residents and develop measures to do so. Recently, the Spanish government has also established advantageous standards for foreign professionals who come to reside in this country.

Another profile of users comes from people with high assets. In Spain, the number of people with a liquid equity of more than 120,000 euros is growing every day. They are potential clients of private banking and of international investment and wealth management systems. Offshore investment allows adding a plus of profitability and opacity to the international investments of a physical person or company. The usual Spanish user begins his investment journey from nearby European tax havens such as Andorra, Gibraltar, Luxembourg, Channel Islands or Switzerland. The first transfers are made in cash until they become more sophisticated and register an offshore company for a better circulation of money. The Spanish client can initiate these offshore activities from home, by mail or Internet, through a bank and through professional offices of tax advisors or investment advisors. Banks all over the world, including those in Spain, have branches, or companies that act as such, in the most important enclaves.