Although the European Union has added several new countries to its “black list” of tax havens this year, ie money havens to which millions of euros go annually from Serbia, a large number of Serbian companies still operate in these territories. However, the latest official data speak of a drastic turnaround in the business of domestic businessmen with offshore zones.
Most of the money from Serbia went to two offshore zones in the Far East
The NBS data, namely, show that this year most of the money from Serbia went to two offshore zones in the Far East. Cyprus, which was once a very popular destination, is no longer at the top of the list, and the first and second place, to the surprise of many, were taken by Hong Kong and Singapore. In the first eight months of this year, almost 700 million euros went to Serbia in these two tax havens, which is more than 90 percent of the total transfers of Serbia for offshore zones.
“A lot of our business has moved to the Far East, so offshore companies have gone in the same direction. Also, EU membership has practically annulled the importance of Cyprus, Malta or Gibraltar as offshore zones, because they also introduced strict rules for bookkeeping, mandatory audits and financial discipline in general. Thus, companies in these countries have lost the character of real offshore companies,” explains Milan R. Kovacevic, consultant for foreign investments, in an interview for Blic and reminds that Cyprus used to be a leader in this segment.
Our interlocutor states that the activities in which offshore companies operate are also changing considerably, so there are more and more jobs that did not even exist before, and which are more suitable for this kind of business. For example, there is now a greater focus on services and owners are looking for jobs where there is no large transport of goods or bulky factory plants.
“Earlier, while offshore zones were completely liberal, these companies only served the owners to have a certificate that they owned a company in another country, they didn’t need anything else. Now the regulations are changing and the possibilities for a specific offshore business are increasingly narrowing”, concludes Kovacevic.
On top of Hong Kong and Singapore
The latest data from the NBS on international payment transactions show that in the period from January to August 2020, the citizens of Serbia made payments to offshore zones in the amount of 731.1 million euros.
The most significant transactions in the first eight months of this year relate to turnover with Hong Kong (546.1 million euros), Singapore (129.2 million euros), the British Virgin Islands (19.7 million euros), Lebanon (9.6 million euros) and Liechtenstein (7.6 million euros).
As stated by the NBS for Blic, most of the payments were made by companies registered for the production of pig iron, steel and ferroalloys (23 percent), exploitation of ores of other ferrous, non-ferrous, precious and other metals (16), non-specialized trade in wholesale (10), wholesale of electrical household appliances (8 percent), manufacture of computers and peripherals (6) and exploitation of crude oil (4 percent).
Offshore zone
Eurostat has classified the following countries and territories as offshore zones: Andorra, Antigua and Barbuda, Anguilla, Aruba, Barbados, Bahrain, Bermuda, Bahamas, Belize, Cook Islands, Curaçao, Dominica, Grenada, Guernsey, Gibraltar, Hong Kong, Island Mann, Jersey, St. Kitts – Nevis, Cayman Islands, Lebanon, St. Lucia, Liechtenstein, Liberia, Marshall Islands, Montserrat, Mauritius, Nauru, Niue, Panama, Philippines, Seychelles, Singapore, St. Martin, Turks and Caicos Islands, St. Vincent and the Grenadines, Virgin Islands (British), Virgin Islands (USA), Vanuatu and Samoa, BiF reports.
