Offshore finance professionals may be struck by the opening paragraph of the foreword to the latest Global Financial Centres Index.

“Now is an incredibly important time for the future growth and the competitiveness of the UK as a global financial leader. This is a role that the UK has held for many years, however, with the effects of the recession and some public loss of confidence in financial services, this position is now being challenged by fast developing nations in Asia and the Middle East.”

If Asia and the Middle East are challenging the position of London as a financial centre, one can only imagine how much of a challenge those regions pose to offshore centres, which, the report notes, have suffered a marked and sustained decline in their standing in recent years.

For me, several points stood out from the report.

First, Jersey maintained its position as the world’s top offshore financial centre. Quite an achievement considering that Jersey’s score must suffer significantly as a result of relatively high personal tax rates and lower quality of life compared to competing offshore jurisdictions (the report’s sources include Euromonitor’s “Top Tourism Destinations”).

In fact, Jersey didn’t just come top among offshores, it was also 8th most frequently cited as a centre “likely to become more significant” (See table 2 below) as well as 8th most frequently cited as a location for a future office. [Sorry about the funky image placement, still getting to grips with our new WordPress blog patform!]

Whatever Jersey is doing, it appears to be working.

Also noteworthy is the trend-line that represents the movement in the Cayman Islands’ rating since the rankings began. Any further drop relative to the other major offshores would see Cayman slip into last place.

The Cayman Islands would do well to use the 14 “competitiveness factors” central to the GFCI methodology as a template for reform that might see the jurisdiction regain its competitive edge among OFC’s.

Incidentally, availability of skilled personnel, is the top-ranked “competitiveness factor” in the researchers’ methodology. The Cayman Islands Immigration officials should take note.

Although all the major offshore centres have lost some ground in the index, BVI and the afore-mentioned Jersey have fared better than the others in recent years.

Malta, which many are watching as an up-and-coming OFC, lost significant ground – 4 places and 16 points (Cayman lost 4 places but only 5 points; the Bahamas lost 3 places and 12 points).



It will be interesting to see what regional governments, the media, industry associations and development agencies make of this. We will keep you posted.