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Uses of offshore services in Financial Crisis 

The recent financial crises in Mexico (1994-1995), Asia (1997-1998), Russia (1998) and most of Argentina (2001-2003), have led to massive capital flight from these countries, in search of an economic climate more secure and stable.

Financial crises are not only in unstable countries and developing countries. It is  thought that countries with greater financial regulation have less crises and fraud. However, no developed country has been free of crises affecting banks and investment agencies. The scams carried out in Spain by investment companies are plentiful, despite the monitoring conducted by the National Securities Market. We have examples of investors who have lost all or most of their capital, as in recent cases of AVA and Gescartera. There are repeated and regular calls from the Bank of Spain to the banks to monitor their risk controls and the National Stock Exchange for investors to use extreme caution when delivering their money to other persons or entities. In recent years they have proliferated in Spain "financial cowboys" companies based on fraud and raising funds that then disappear, often as those and of other criminals. At other times, we talked about respectable investment companies to meet all legal requirements for an operation, also being audited by reputable auditors. In late 2003, 47 financial intermediaries on Wall Street were arrested for fraud in trading, not to mention accounting scandals that affected many U.S. companies from 2001 to 2004.

The crisis stimulated, in any country, causes capital flight and people, leading many of them to set limits on capital movements, more or less rigor. When there is no trust, money and people flee. Occasionally there are countries facing critical situations and where its citizens are turning to offshore services to save their money and belongings, if not their lives. On other occasions, the crisis can extend over years. For example, in Colombia the insecurity in the country, the war against the guerrillas, and lack of investment opportunities, stimulate capital flight, estimated between 1998 and 2002 at 10,000 million dollars. The offshore centres are to ensure financial stability to those who deposit their savings. These warranties are sometimes even greater than those offered to their own citizens. We are not free of financial crises anywhere, and it is understandable that many people, especially those that live in political, economic and social unstable, seeking quieter places for your money. The economic, legislative and political is inherent in low tax jurisdictions (offshore jurisdictions).

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