New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    Which of the following is NOT a characteristic of

    offshore financial centers?
    A Low taxes Correct Answer Incorrect Answer
    B Minimal regulation Correct Answer Incorrect Answer
    C Strict secrecy laws Correct Answer Incorrect Answer
    D Providing a wide range of international financial services Correct Answer Incorrect Answer
    E All of the above are characteristics of offshore financial centers Correct Answer Incorrect Answer

    Solution

    Offshore financial centers: Offshore financial centers (OFCs) are jurisdictions that provide tax and regulatory advantages to businesses and individuals. These are centres that are primarily tax havens for wealth management and global tax management rather than providing the fully array of international financial services. Examples include the Cayman Islands, Bermuda, and the British Virgin Islands. These centers offer low taxes, minimal regulation, and strict secrecy laws that make them attractive to those seeking to reduce their tax burden or conceal their financial activities. However, OFCs have faced criticism for facilitating tax evasion and money laundering.

    Practice Next