In defence of financial services industry

Dubai - Reinforce transparency and improve efficiency of financial hubs

Over the last couple weeks, the Panama Papers allegations have sent shockwaves around the world - perhaps, unsurprisingly, due to their "offshore" nature, especially in large expatriate destinations, such as the UAE.
Some 11.4 million leaked documents from the world's fourth-largest offshore law firm, Panama-based Mossack Fonseca, suggest that it had been encouraging its wealthy clients to commit tax evasion, which is of course illegal, by investing in offshore structures.
As such, international investing has been come under scrutiny in the media like never before.  Sensationalism, rather than balanced reporting, has in most cases taken a stranglehold, with offshore investors having been portrayed as secretly hoarding funds on "treasure islands".
The fact is, even the mere mention of so-called "tax havens" seems antiquated, as within this present era of transparency and enhanced regulations, private financial data is now routinely exchanged between all major tax authorities around the world.
Whilst, of course, there are certain cases of dubious offshore deals, and tax evasion is a severe global problem, the Panama Papers case is not an accurate representation of the international financial services industry.
The overwhelming majority of offshore investing is wholly within the law and undertaken by law-abiding individuals, who can benefit from achieving better returns by international investing, and taking advantage of more investment options and increased flexibility, as part of an efficient and robust financial planning strategy.
In fact, offshore investing is fundamental to the expatriate community.
Essentially, offshore accounts are used predominantly for convenience. They are, after all, just accounts located outside a client's country of residence. 
They offer secure, flexible and worldwide access to funds, which is key considering expats usually live comparatively transient lifestyles. They also offer a diverse selection of multicurrency savings and investment solutions, giving investors unlimited access to international markets and to all major exchanges.
Other significant advantages of offshore investing include that they permit businesses to circumvent paying double tax on the same income, and offer legitimate financial refuge for individuals based in locations where there may be economic and political unrest, extreme currency volatility or confiscation of assets. 
For instance, business people located in Russia and Ukraine regularly place assets in offshore accounts to protect them from criminal raids, whilst others may opt for an offshore structure for inheritance and estate planning reasons.
This financial privacy is, along with the others I have mentioned, one of the main benefits of the offshore system. However, there is a crucial difference between financial privacy and financial secrecy. 
As I recently stated that exchanging information between bona fide government authorities for relevant tax matters is, typically, entirely legitimate. Sharing financial information with anyone else, such as your competitors, or indeed anyone else for that matter, is not.
Privacy can be necessary. Secrecy is not.
In addition, international financial centres are also opted for asset protection and restructuring ownership of assets. Individuals could transfer ownership of their wealth to other legal entities outside their home country, through trusts for example, and will no longer be subject to seizure or other domestic difficulties.
Consequently, over half of global assets and investments are kept offshore, and many of the world's most well-known businesses hold funds in offshore jurisdictions.  
The Panama Papers case, therefore, should be used as an incentive to further reinforce the transparency, efficiency and credibility of these vital financial hubs, the products and services they offer and the offshore financial industry overall.
Indeed, as the world becomes ever more globalised, offshore investing will continue to increase in popularity in years to come as the international financial services market expands further.
As such, consulting with an experienced, specialist financial adviser, who has relevant cross-border expertise, is key to making the most of international investing.
The writer is the founder and CEO of deVere Group. Views expressed are his own and do not reflect the newspaper's policy.