Abstract
Analysing Curaçao as an offshore financial centre from its inception to its gradual decline, we find that it originated and evolved in close concert with the demand for such services from Western countries. Dutch banks and multinationals spearheaded the creation of institutions on the island facilitating tax avoidance. In this they were aided and abetted by their government, which firmly supported the Antilles in getting access to bilateral tax treaties, notably the one with the United States. Until the mid 1980s Curaçao flourished, but then found it increasingly difficult to keep a competitive advantage over other offshore centres. Meanwhile the Curaçao connection had enabled the Netherlands to turn itself into a hub for international revenue flows that today still feed both Dutch tax income and specialised financial, legal and accounting services.
Highlights
Offshore financial centres (OFCs) tend to have a bad press
OFC evolved in close symbiosis with the Netherlands
In that sense Curaçao provides a perfect example of the perceived advantages both of small dependent jurisdictions as home to financial services and of the core financial centres’ creation of a new, dependent semi-periphery (Vlcek ; Palan )
Summary
Offshore financial centres (OFCs) tend to have a bad press. They are pilloried for providing legal and financial facilities helping countries, corporations and High Net Worth Individuals (HNWIs) to escape economic sanctions, taxes and anti-money-laundering regulation.
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