International Financial Centers in the context of "Global financial system"

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⭐ Core Definition: International Financial Centers

A financial centre (financial center in American English) or financial hub is a location with a significant concentration of commerce in financial services.

The commercial activity that takes place in a financial centre may include banking, asset management, insurance, and provision of financial markets, with venues and supporting services for these activities. Participants can include financial intermediaries (such as banks and brokers), institutional investors (such as investment managers, pension funds, insurers, and hedge funds), and issuers (such as companies and governments). Trading activity often takes place on venues such as exchanges and involves clearing houses, although many transactions take place over-the-counter (OTC), directly between participants. Financial centres usually host companies that offer a wide range of financial services, for example relating to mergers and acquisitions, public offerings, or corporate actions; or which participate in other areas of finance, such as private equity, private debt, hedge funds, and reinsurance. Ancillary financial services include rating agencies, as well as provision of related professional services, particularly legal advice and accounting services.

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International Financial Centers in the context of Corporate tax haven

Corporate haven, corporate tax haven, or multinational tax haven is used to describe a jurisdiction that multinational corporations find attractive for establishing subsidiaries or incorporation of regional or main company headquarters, mostly due to favourable tax regimes (not just the headline tax rate), and/or favourable secrecy laws (such as the avoidance of regulations or disclosure of tax schemes), and/or favourable regulatory regimes (such as weak data-protection or employment laws).

Unlike traditional tax havens, modern corporate tax havens reject they have anything to do with near-zero effective tax rates, due to their need to encourage jurisdictions to enter into bilateral tax treaties that accept the haven's base erosion and profit shifting (BEPS) tools. CORPNET show each corporate tax haven is strongly connected with specific traditional tax havens (via additional BEPS tool "backdoors" like the double Irish, the Dutch sandwich, and single malt). Corporate tax havens promote themselves as "knowledge economies", and intellectual property (IP) as a "new economy" asset, rather than a tax management tool, which is encoded into their statute books as their primary BEPS tool. This perceived respectability encourages corporates to use these International Financial Centres (IFCs) as regional headquarters (i.e. Google, Apple, and Facebook use Ireland in EMEA over Luxembourg, and Singapore in APAC over Hong Kong/Taiwan).

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LINKED FROM (PARENTS)
← Corporate tax haven
LINKS TO (CHILDREN)
New York City → Financial District, Manhattan → Lower Manhattan → Wall Street → Fintech → American English → Commerce → Financial services → Banking → Asset management → Insurance → Financial markets → Global financial system → Financial intermediary → Institutional investors → Pension fund → Hedge funds → Issuers → Trade → Exchange (organized market) → Clearing house (finance) → Over-the-counter (finance) → Mergers and acquisitions → Public offering → Corporate action → Finance → Private equity → Private debt → Hedge fund → Reinsurance → Rating agencies → Professional services → Practice of law → Accounting →